B  3  lib  sn 


CL^ 


Practical  Accounting 

DENNIS 


Practical  Accounting 


by 

WILLIAM    H.    DENNIS 
B.C.S.,  C.P.A. 

Professor  of  the  Principles  and  Practice  of  Accounting 

in  the  New  York  University  School 

of  Commerce,  Accounts 

^and  Finance 


*^   OF  THE 

UNIVERSITY   ,, 

OF  // 


THIRD  EDITION 
1909 


63"^ 


H^^'P^ 


COPYRIGHT,    1904,   1907 

BY 

WILLIAM   H.  DENNIS 


^     OF  THE 

UNIVERSITY 

OF 


// 


Foreword 

THE  third  edition  of  this  work,  which,  as  a 
whole,  includes  the  form  books  (26  in  num- 
ber) required  to  practically  work  out  the  prob- 
lems herein  contained,  is  a  growth  of  some  five 
years  of  experience  by  the  author  with  the  classes 
of  the  School  of  Commerce,  Accounts  and  Finance. 
It  is  the  author's  belief  that  it  meets  the  require- 
ments of  all  students  of  accounting,  who  seek 
practical  experience  in  a  subject  which  can  other- 
wise be  gained  only  by  the  usual  and  long  drawn 
out  .clerkship. 

Accounting  as  a  science,  in  America  at  least, 
is  in  its  infancy,  though  as  a  practical  subject,  it 
is  co-equal  with  business  in  age.  With  the  disap- 
pearance of  the  individual,  and  the  rapid  growth 
of  firms  and  associations  it  is  becoming  more  and 
more  intricate  and  its  proper  application  can  be 
had  only  by  a  thorough  mastery  of  both  the 
theoretical  and  practical,  and  that  by  men  who 
specialize  in  the  subject.  It  is  hoped  that  this 
work  will  lead  the  student  to  appreciate  the  science 
and  aid  him  to  master  a  subject  which  more  and 
more  is  engaging  the  energy  and  thought  of 
many  minds.  ^   ^   ^ 


193394 


PART  I. 


Part   1. 

February  i,  1902. 

A.  Arnold,  of  the  City  of  New  York,  and  B.  Burt,  of  Yonkers,  have 
this  day  formed  a  copartnership  for  the  purpose]^of  conducting  a  manu- 
facturing business  under  the  firm  name  of 

Arnold  &  Burt. 

Arnold  is  to  contribute,  as  his  share  of  the  capital  of  the  firm,  fifty 
thousand  dollars  in  cash,  and  Burt  is  to  contribute  real  estate  and 
buildings  valued  at  eighty  thousand  dollars,  making  the  total 

Capital 
$130,000. 

Arnold  is  to  receive  a  salary  of  $12,000  per  annum  in  addition  to  his 
share  of  the  profits.  Interest  is  to  be  credited  on  capital  invested  at  6 
per  cent.  Profits  and  losses  are  to  be  divided  in  the  proportion  of  60 
per  cent,  to  Arnold  and  40  per  cent,  to  Burt. 

The  foregoing  statement  is  to  be  written  in  the  Journal. 

Books  to  be  Opened. 

General  Ledger,  Customers'  Ledger,  Creditors'  Ledger,  Purchase 
Book,  Sales  Book,  Petty  Cash  Book,  Cash  Book  and  Journal. 

Accounts  to  be  Opened  in  the  General  Ledger. 


FOLIO. 

FOLIO. 

I  Labor  Account. 

5 

Sundry  Expense. 

I  Superintendence. 

5 

Discount  Lost. 

I  Raw  Material. 

5 

Discount  Gained. 

I  Packing  Material. 

5 

Sales. 

2  Inventory. 

6 

Cash. 

2  Heat  and  Power. 

6 

Petty  Cash. 

2  Factory  Expense. 

6 

Sundry  Customers'  Con- 

2 Freight  Inward. 

trolling  Account. 

3  Cartage. 

6 

Real  Estate. 

3  Insurance. 

7 

Horses,  Wagons  and  Harness. 

3  Postage. 

7 

Machinery  and  Tools. 

3  Stable  Expense. 

7 

Notes  Receivable. 

4  Advertising. 

7 

Notes  Payable. 

4  Traveling  Expense. 

8 

Sundry  Creditors'  Controlling 

4  Office  Salaries. 

Account. 

4  Stationery  and  Printing. 

8 

Furniture  and  Fixtures. 

FOLIO  FOLIO 

8  Reserve  for  Depreciation  of  lo  A.  Arnold's  Drawing  Account. 

Machinery  and  Tools.  lo  B.  Burt's   Drawing   Account. 

8  Reserve  for  Taxes.  lo  C.  Conant's  Drawing  Account. 

9  Reserve  for  Depreciation  of  ii  C.  Conant. 

Horses,  Wagons  and  Harness,  ii  Burt  &  Conant. 

9  Reserve  for  Depreciation  on  12  Manufacturing  Account. 

Furniture  and  Fixtures.  12  Trading  Account. 

9  Reserve  for  Bad  Debts.  13  Profit  and  Loss. 

9  A.  Arnold's  Capital  Account.  13  Adjustment. 

10  B.  Burt's  Capital  Account.  14  Realization  and  Liquidation. 

The  first  marginal  letter  refers  to  the  book  of  orig- 
inal entry  to  be  used.  C.  for  Cash  Book,  P. 
Purchase  Book,  S.  Sales  Book,  etc.,  etc.  The 
next  two  or  more  letters  indicate  the  columns  in 
which  the  item  is  to  be  entered.  Viz:  C, 
NC,  GL.  signifies  that  A.  Arnold  is  to  be  cred- 
ited in  the  cash  book  with  $50,000;  first  in  the 
net  cash  column  and  again  in  the  general  ledger 
column. 

February  i,  1907. 

A.  Arnold  contributes  $50,000  in  cash. 

B.  Burt  contributes  Real  Estate  worth  $80,000. 

3rd. 
Purchased  of  the  Bogota  Machine  Company,  city, 

a  boiler  and  machinery  for  $30,000. 
Purchased  of  the  Office  Supply  Company,  city, 

office  furniture,  $5,000. 

4th. 
Purchased  of  the  Howard  Coal  Company,  city,  150 

tons  of  coal,  $450. 
Purchased  of  B.  Jones,  city,  oil  and  waste,  $50. 

5th. 

Purchased  of  C.  Williams  100  tons  raw  material, 
$5,000;   60  days  or  cash  less  2  per  cent. 

Purchased  of  L.  Mead,  city,  5,000  lbs.  paper,  $150. 

Purchased  of  the  Sommerville  Paper  Box  Com- 
pany, city,  1,000,000  paper  boxes  for  $5,000 
cash,  less  5  per  cent. 

6th. 
P.,  A.,  RM.  Purchased  of  Paul   Burt   30  tons   raw  material, 

$900  cash,  less  2  per  cent. 
7th. 
C,  NC,  GL.  Paid  Engineer's   Wages,   $150;     Factory   Hands, 

$250.     (Charge  Heat  and  Power  $150;    Labor 
$250.)    A.  Arnold  drew  $500. 

8 


c. 

J. 

,  NC,  GL. 

p. 

,  A.,M.  &T. 

p. 

,A.,S. 

p. 

,  A.,  H.  &  P. 

p.: 

,  A.,  H.  &P. 

P., 

,  A.,  RM. 

P., 
P., 

,  A.,  PM. 
A.,  PM. 

9  th. 

P.,  A.,  S.  Purchased  of  Tattersall  &  Company,  city,  horses, 

wagons,  harness,  $7,000. 

P.,  A.,  PM.  Purchased  of  Silas  Herring,  city,   1,000  packing 

cases,  $300. 

S.,  A.,  FG.  Sold  Isaac  Smith,  St.  Louis,  Mo.,  1,000  cases  fin- 

ished goods,  $12,500;  60  days,  note  or  cash,  less 
3  per  cent. 

S.,  A.,  FG.  Sold  Abraham  Oliver,   Cincinnati,   O.,   500  cases 

goods,  $6,250. 

12th. 

P.,  A.,  S.  &  P.  Purchased  of  Geo.  F.  Nesbitt  &  Company,  city, 

stationery,  $1,500. 
S.,  A.,  FG.  Sold   Mark   Lane,    St.    Paul,    Minn.,    1,000   cases 

goods,  $12,500. 
S.,  A.,  FG.  Sold  Matthew  Maine,  Portland,  Me.,  1,000  cases 

goods,  $12,500. 
P.,  A.,  RM.  Purchased  of  George  Wallace  &  Company,  city, 

100  tons  raw  material,  $6,000. 
P.,  A.,  M.  &  T.  Purchased  of  Lake  &   Company,   machinery   for 

$650. 
S.,  A.,  FG.  Sold    Frank    Patterson,    Phila.,    Pa.,    250    cases 

goods,  $3,125. 

13th. 
P.,  A.,  H.  &  P.  Received  from  John  Horn  &  Company,  city,  bill 

for  repairs  to  machinery,  $125. 
S.,  A.,  FG.  Sold  George  Bigelow,  Baltimore,  500  cases  goods, 

$3,125. 
C,  NC,  GL.  Drew   $250   from   the   bank,,  charge   Petty   Cash 

(also  make  an  entry  in  the  Petty  Cash  book  in 

column  for  Receipts  $250). 
PC,  T.,  P.  Paid  for  postage  stamps,  $30. 

P.,  A.,  PM.  Purchased   of  Johnson   &   Company,   city,    5,000 

packing  cases,  $1,500. 
PC,  T.,  FE.  Paid  for  brooms,  soap  and  towels  for  factory  use, 

$50. 

14th. 
P.,  A.,  RM.  Purchased   of  Selleck  &   Company,  30   tons   raw 

material,  $750. 
C,  NC,  Cr.  L.  Paid   Howard   Coal  "Company,    city,   bill    of   4th 

inst.,  $450. 
C,  NC,  D.,  Cr.  L.        Paid  C  Williams,  $4,900;    discount,  $100.     (NET 

Cash,  $4,900;  discount,  $100;  creditors,  $5,000.) 
C,  NC,  D.,  Cr.  L.        Paid  Sommerville  Paper  Box  Company,   $4,750; 

discount,  $250.     (NET  Cash,  $4,750;   Discount, 

$250;   Creditors,  $5,000.) 
C,  NC,  GL.  Paid  for  Labor,  $9,500;    Superintendence,  $250; 

Ofhce  Salaries,  $300;    Stable  Expense  (Drivers' 

Wages,  $150;  A.  Arnold,  $500. 


PC 

p., 

,A., 

.,S. 

s. 

&P. 

P. 

p., 

,A., 

H.  , 

&P. 

s., 

A., 

FG. 

s., 

A., 

FG. 

c, 

NC 

;.,Cr 

•.  L. 

s., 

A., 

FG. 

p.: 

,  A., 

S. 

p.,  A., 
PC.,T 

H.  . 
.,  P. 

&P. 
,  S.  &  P. 

Paid  for  pens,  pencils,  etc.,  etc.,  $7.50;  postage 
stamps,  $20. 

Received  bill  of  Armstrong  &  Company  for  adver- 
tising, $25,070. 

1 6  th. 

Purchased  of  the  Howard  Coal  Company  150  tons 
coal,  $450. 

Sold  Lewis  Welling,  Trenton,  N.  J.,  250  cases 
finished  goods,  $3,125. 

Sold  John  Lyon,  Buffalo,  N.  Y.,  500  cases  finished 
goods,  $6,250. 

Paid  George  F.  Nesbitt  &  Company's  bill  of  12th, 
$1,500. 

Sold  James  Bruce,  New  Orleans,  i  ,000  cases  finished 
goods,  $12,500. 

Received  Armstrong  &  Company's  bill  for  adver- 
tising, $23,000. 

Received  L.  Herzog's  bill  for  repairs  to  boiler,  $245. 

Paid  for  postage  stamps,  $20;   stationery,  $40. 

1 8th. 

PC,  T.,  S.  &  P.,  FE.  Paid  for  washing  windows  in  factory,  $30;    sta- 
tionery, $25. 

Paid  Bogota  Machine  Company,  $15,000;    Office, 
Supply  Company,  $2,500. 

Sold  Ezra  Wheeler,  1,000  cases  of  goods,  $12,500. 

19th. 
Paid  bill  of  Tattersall  &  Company,  $7,000. 
Sold  Lewis  Welling  1,000  cases  of  goods,  $12,500. 
Purchased    of    the    Bogota    Machine    Company, 

knives,  $160. 

20th. 
Paid  bill  of  B.  Jones,  $50,  and  bill  of  L.  Mead, 

$150. 
Sold  Isaac  Smith  1,000  cases  goods,  $12,500. 
Received  check  of  Isaac  Smith  for  bill  of    loth 

inst.,$i2,i25;  discount,  $3 75.  (Net  Cash,  $12,125; 

Discount,  $375;    Customers,  $12,500.) 

2lSt. 

C,  NC,  GL.  Paid  for  Labor,  $10,250;  Superintendence,  $250; 

Office  Salaries,  $300;  Engineers  (Heat  &  Power), 
.  $150;     Drivers    (Stable    Expense),    $150;     A. 

Arnold,  $750;   Petty  Cash,  $250. 
C,  NC,  Cr.  L.  Paid  Silas  Herring's  bill  of  loth  inst.,  $300. 

S.,  A.,  FG.  Sold  Matthew  Maine  1,000  cases,  $12,500. 

23rd. 
P.,  A.,  H.  &  P.  Purchased   of   Howard   Coal   Company    150   tons 

coal,  $450. 

10 


c. 

,  NC,  Cr.  L. 

s., 

,  A.,  FG. 

c 

s., 
p. 

,  NC,  Cr.  L. 
A.,  FG. 
,  A.,  M.  &T. 

c 

,  NC,  Cr.  L. 

s.. 
c 

,  A.,  FG. 

,  NC,  D.,  Cu.  L. 

• 


p.,  A.,  PM.  Purchased  of  Johnson  &  Company  3,000  packing 

cases,  $900. 

C,  NC,  D.,  GL.  Discounted  firm's  note  at  Fourth  National  Bank 

for  $10,000;  discount,  $50.  (Credit  Notes  Pay- 
able, $10,000;   Net  Cash,  $9,950.) 

J.  Received  Abraham  OHver's  note  in  settlement  of 

bill  of  nth,  $6,250.  (Notes  Receivable  Dr.  to 
Abraham  OHver.) 

J.  Received  Mark  Lane's  note  for  $12,500   in  pay- 

ment of  bill  of  12th. 

J.  ^  Received   Matthew   Maine's   note   for  $12,500  in 

settlement  of  bill  of  12th. 

24th. 

C,  NC,  D,,  GL.  Discounted    notes    of    Oliver,    Lane    and    Maine 

amounting  to  $31,250;   discount,  $372.90.    (Net 

Cash,  $30,877.10.) 
P.,  A.,  RM.  •         Purchased  of  C.  WilHams  1,000  tons  raw  materials, 

$45,000;   60  day  note. 
J.  Gave  C.  Williams  60  day  note,  $45,000,  in  payment 

of  account. 
S.,  A.,  FG.  Sold  John  Ireland  1,000  cases  goods,  $12,500. 

S.,  A.,  FG.  Sold  Thomas  Fast  500  cases  goods,  $6,250. 

25th. 

P.,  A.,  SE.  Received  Harry  Bennett's  bill  of  $70  for  horse- 

shoeing. 
PC,  T.,  HW.  &  H.,     Paid  $60  for  horse  blankets;    $60  for  repairs  to 

S.,  H.  &  P.  boiler;   $2.50  for  matches. 

S.,  A.,  FG.  Sold  George  Bi^elow  1,000  cases  goods,*$i2,5oo. 

28th. 

C,  NC,  GL.  Paid  for  Labor,  $10,500;    Superintendent,  $250; 

Office  Salaries,  $300;  Engineers,  $150;  Stable 
Expense,  $150;   A.  Arnold,  $500. 

S.,  A.,  FG.  Sold  Seymour  Bunce  500  cases  goods,  $6,250. 

P.  A.,  S.  E.       •  Received  bill  of  Jansen  &  Company  for  care  of 

horses,  $250. 

Add  all  columns  in  Petty  Cash. 
Having  entered  the  transactions  for  the  month  in 
the  subsidiary  books,  the  student  must  now  post 
the  items  to  the  several  accounts  in  the  ledgers 
as  follows: 
Sales  Book.  Open  accounts  in  the  Customers' 
Ledger  for  the  thirteen  customers  and  debit 
their  accounts  with  the  amounts  purchased; 
add  the  two  columns  (amount  and  finished 
goods),  and  if  they  are  correctly  written  up 
will  amount  to  $159,375  each.  To  the  right 
of  the  Finished  Goods  column  make  the  following 

.„  ^  entry: 

II 


Customers'  Controlling 

Account $159,375.00 

To  Sales $i59,375-oo 

Sales  for  the  month  of  February  and  post  this 
entry  in  the  General  Ledger. 

Purchase  Book.  Open  accounts  for  twenty  credi- 
tors in  the  Creditors'  Ledger  and  post  the  sev- 
eral amounts  to  their  credit  in  the  Creditors' 
Ledger,  then  make  the  following  summary 
entry  at  the  bottom  of  the  page  in  the  Purchase 
Book: 

Sundries. 

To  Sundries. 

Horses,  Wagons 

and  Harness $7,000.00 

Advertising 48,070.00 

Furniture  &  Fixtures.  5,000.00 

Raw  Materials 57,650.00 

Packing  Materials. .. .  7,850.00 

Machinery  and  Tools  30,810.00 

Stable  Expense 320.00 

Stationery  and  Print- 
ing    1,500.00 

Heat  and  Power 1,770.00 

To  Creditors'  Controlling  Ac- 
count   $159,970.00 

Post  th^se  amounts  in  the  General  Ledger. 

Cash  Book.  Debit  Side.  Post  the  three  items 
to  the  credit  of  the  several  accounts  in  the 
General  Ledger,  and  credit  Smith  with  the 
$12,500  in  the  Customers'  Ledger.  At  the 
bottom  of  the  page  make  the  following  entry: 

Sundries. 

To  Sundries. 

Cash $102,952.10 

Discounts 797-90 

To  Customers'  Controlling  Ac- 
count        $12,500.00 

General  Ledger  Account 91,250.00 

Post  cash  discounts  and  controlling  accounts  items 
but  do  not  post  the  $91,250,  as  that  has  been 
entered  in  the  ledger  to  the  credit  of  Arnold, 
Notes  Payable  and  Notes  Receivable. 

Cash  Book.  Credit  Side.  Post  the  several  items 
in  the  General  Ledger  column  to  the  debit  of 
the  accounts  in  the  General  Ledger  and  likewise 

12 


charge  the  creditors  with  the  amounts  paid  to 
them  as  per  creditors'  column.  Make  the  fol- 
lowing summary  entry: 

Sundries. 

To  Sundries. 

Creditors'  Control- 
ling Account $36,950.00 

General  Ledger 

(items  posted) ... .         35,800.00 

To  Cash $72,400.00 

Discounts 350-oo 

Post  to  the  above  accounts  (in  the  General  Ledger) 
all  the  items  except  $35,800,  which  has  already 
been  posted  in  detail. 

Petty  Cash  .Book.  Make  the  following  sum- 
mary entry  and  post  to  the  accounts  in  the 
General  Ledger: 

Sundries. 

To  Sundries. 

Postage $70.00 

Stationery  and  Printing. .  72.50 

Factory  Expense ^0.00 

Horses,  Wagons  and 

Harness 60.00 

Sundry  Expense 2.50 

Heat  and  Power. ..;....  60.00 

The  Petty  Cash  Account $345.00 

Journal.      Make    and   post  the    following   entry: 

Sundries. 

To  Sundries. 

General  Ledger 

(posted) $111,250.00 

Sundry  Creditors' 
Controlling  Ac- 
count          45,000.00 

To  General  Ledger  (posted). .     $125,000.00 
Customers'  Controlling 

Account 31,250.00 

This  entry  is  made  up  of  the  $80,000  charged  to 
Real  Estate  and  the  $31,250  charged  to  Bills 
Receivable  in  the  General  Ledger  and  the 
$80,000  already  posted  to  the  credit  of  Cap- 
ital Account  and  the  $31,250,  in  notes,  which 
has  not  as  yet  been  posted  to  the  controlling 
account  in  the  General  Ledger,  and  the  $45,000 


13 


^    OF  tHg 

UNIVERSITY 


posted  to  the  debit  of  C.  Williams  but  not  yet 
posted  to  Creditors'  Controlling  Account. 


TRIAL  BALANCE. 

February. 

Labor $30,500.00 

Superintendence 750.00 

Raw  Material 57,650.00 

Packing  Material 7,850.00 

Heat  and  Power 2,280.00 

Factory  Expense 80.00 

Stable  Expense 770.00 

Postage 70.00 

Advertising 48,070.00 

Office  Salaries. .' 900.00 

Stationery  and 

Printing :  1,572.50 

Sundry  Expense  2.50 

Discounts  Lost 797-90 

Discounts  Gained $350.00 

Sales 159,375.00 

Cash 30,552.10 

Petty  Cash. i55-oo 

Customers'  Control- 
ling Account 115,625.00 

Real  Estate 80,000.00 

Horses,  Wagons  and 

Harness 7,060.00 

Machinery  and 

Tools 30,810.00 

Notes  Payable 55,000.00 

Creditors'  Controlling  Account 78,020.00 

Furniture  and  Fix- 
tures   5,000.00 

B.  Burt,  Capital 80,000.00 

A.  Arnold,  Capital 50,000.00 

A.  Arnold,  Draw- 
ing   2,250.00 

$422,745.00     $422,745.00 


March  i. 

P.,  A.,  RM.  Purchased  of  Frank  Mead  1,000  tons  raw  mate- 

rial, $40,000. 

C,  NC,  GL.  Paid  freight  on  goods  received  from  Mead,  $520. 

S.,  A.,  FG.  Sold  Abraham  Oliver,  1,000  cases  finished  goods, 

$12,500. 


Paid  for  postage  stamps,  $50;  stationery  and 
printing,  $30;  traveling  expense  of  Arnold  to 
Chicago  and  return,  $100. 

Drew  $500  for  petty  cash. 

2nd. 

Sold  Isaac  Smith,  St.  Louis,   1,000  cases  finished 

goods,  $12,500. 
Sold  W.  Armitage  500  cases  finished  goods,  $6,250. 

3rd. 

Sold  Lewis  WelHng,  Trenton,  1,000  cases  finished 

goods,  $12,500. 
Paid  for  ink  and  stationery,  $10. 
Purchased  of  Howard  Company   coal,   300   tons, 

$900. 
Paid  Howard  Company  coal  bills  to  date,  $900. 

4th. 

John   Ireland   paid   his   bill   Feb.    24th,   $12,125; 

discount,  $375.  ' 
Sold    John    Ireland    1,000    cases    finished    goods, 

$12,500. 
Sold  Abraham   OHver   500   cases   finished  goods, 
$6,250. 

5th. 

Returned  to  Paul  Burt  10.  tons  raw  material, 
$300.  (Make  this  entry  at  the  bottom  of  the 
page.) 

Paid  to  Paul  Burt  bill  of  6th  ult.,  $882 ;  Discount, 
$18. 

Paid  for  Labor,  $11,000;  Superintendence,  $250; 
Office  Salaries,  $300;  Engineers,  $150;  Stable 
Expense,  $150;   Arnold,  $750.- 

7th. 

C,  NC,  D.,  GL.  Discounted  firm's  note,  $20,000;    discount,  $200; 

net,  $19,800. 
S.,  A.,  FG.  Sold  Frank  Patterson  1,000  cases  finished  goods, 

$12,500. 
P.,  A.,  S.  Purchased  new  harness  of  C.  Cook,  $450. 

C,  NC,  GL.  Paid  bill  for  cartage  of  1,000  tons  raw  material 

from  pier  to  store,  $750. 

8th. 

S.,  Cr.  A.,  Dr.  W.  Armitage  returned   100  cases  finished  goods. 

Sales.  $1,250.     (Make  this  entry  at  the  bottom  of  the 

page  of  the  Sales  Book)  and  post  in  the  re- 
verse of  the  original  entry. 

C,  NC,  Cr.  L.  Paid  bill  of  Lake  &  Company,  $650. 

15 


PC 

:.,T. 

TE. 

,  P.,  S.  &  P 

c. 

NC 

,,GL. 

s., 

A., 

FG. 

s., 

A., 

FG. 

s., 

A., 

FG. 

PC 

:.,T. 

,  A., 

,  S.  &  P. 
H.  &P. 

c, 

,  NC 

.,  Cr.  L. 

c, 

,  NC 

.,  Cu.  L. 

s., 

A., 

FG. 

s.. 

A., 

FG. 

p. 

,  A., 

RM. 

c 

,  NC 

.,  D.,Cr. 

L. 

c 

,  NC 

.,GL. 

S.,  A.,  FG.  Sold  George  Bigelow   i,ooo  cases  finished  goods, 

$12,500. 

9th. 
C,  NC,  Cr.  L.  Paid   John   Horn   &   Company   bill   of   February 

13th,  $125. 
PC,  T.,  P.,  SE.  Paid  for  postage   stamps,   $50;    paid  veterinary 

surgeon,  $30. 

loth. 
S.,  A.,  FG.  Sold    Mark    Lane     1,000    cases    finished    goods, 

$12,500. 
S.,  A.,  FG.  Sold  Matthew  Maine   1,000  cases  finished  goods, 

$12,500. 

nth. 
P.,  A.,  RM.  Purchased  of  Frank  Mead  1,000  tons  raw  material, 

$35,000. 
PC,  T.,  H.  &  P.  Paid  for  oil,  $90. 

P.,  A.,  H.  &  P.  Purchased   of   Howard   Coal   Company    150   tons 

coal,  $450. 
C,  NC,  Cr.  L.  Paid  Johnson  &  Company  bill  of  February  13th, 

$1,500. 

12th. 
C,  NC,  GL.  Paid  for  Labor,  $12,100;  Drivers  (Stable  Expense), 

$150;    Engineers,  $150;   Superintendence,  $250; 

Office  Salaries,  $300;    A.  Arnold,  $500. 

14th. 
P.,  A.,  PM.  Purchased  of  Sommerville  Paper  Box  Company 

5,000,000   paper  boxes,   $25,000;    cash,   less   5 

per  cent. 
P.,  A.,  RM.  Purchased   of   Paul   Burt   30   tons   raw   material, 

$900. 
P.,  A.,  PM.  Purchased  of  L.  Sanger  packing  cases,  $5,000. 

C,  NC,  Cr.  L.  Paid  Selleck  &  Company  bill  of  February   14th, 

$750- 

15th. 

A.  Arnold  and  B.  Burt  agree  to  sell,  and  C  Conant 
agrees  to  purchase  a  15  per  cent,  interest  in  the 
Profits  and  Losses  of  the  business  in  consider- 
ation of  the  payment  of  $30,000  by  the  Vendee 
to  the  Vendors.  Of  this  sum  Arnold  is  to  re- 
ceive 60  per  cent,  and  Burt  40  per  cent.  C 
Conant,  in  lieu  of  capital,  is  to  contribute  his 
skill  and  labor,  which  are  valuable.  At  the 
end  of  the  year,  i.  e.,  February  ist  to  Decem- 
ber 31st,  the  profits  and  losses  are  to  be  divided 
between  the  three  partners  in  the  proportion  of 
50  per  cent,  to  Arnold,  35  per  cent,  to  Burt, 
and  15  per  cent,  to  Conant,  but  subject  to  the 
former  conditions  as  to  interest  on  capital 
(6  per  cent.)  and  salary  to  Arnold  of  $12,000 

16 


per   annum.      Make    the    entries   affecting   the 
accounts  of  the  partners,  as  follows^ 

J.  C.  Conant $30,000 

To  A.  Arnold's  Drawing $18,000 

B.  Burt's  "  12,000 

A.  Arnold  and  B.  Burt  have  agreed  to 
sell  and  C.  Conant  to  purchase  a 
15  per  cent,  interest  in  the  profits 
and  losses  arising  from  the  trans- 
actions (commencing  Feb.  ist  last) 
in  consideration  of  Thirty  Thou- 
sand Dollars  paid  by  the  Vendee 
to  the  Vendors;  of  this  amount 
A.  Arnold  is  to  receive  60  per 
cent,  and  B.  Burt  40  per  cent. 
The  profits  and  losses  are  to'  be 
divided  in  the  proportion  of  50 
per  cent,  to  Arnold  and  35  per 
cent,  to  Burt,  15  per  cent,  to  C. 
Conant,  but  subject  to  conditions 
mentioned  in  the  Articles  of  Co- 
partnership as  to  Arnold's  salary 
and  the  interest  on  capital. 

C,  NC,  GL.  Received  from  C.  Conant  check  for  $30,000. 

S.,  A.,  FG.  Sold   Lewis   WeUing   3,000   cases   finished   goods, 

$37'5oo- 
S.,  A.,  FG.  Sold    John    Lyon    2,000    cases    finished    goods, 

$25,000. 
P.,  A.,  RM.  Purchased  of  C.  Williams  3,000  tons  raw  material, 

$105,000. 
J.  Gave    notes    for    above    account    (C.    Williams) 

$15,000,  30  days;    $45,000,  60  days;    $45,000, 

90  days. 
C,  NC,  Cu.  L.  John  Lyon  paid  bill  of  i6th  ult.,  $6,250. 

1 6th. 

P.,  A.,  RM.  Purchased  of  Drake   &   Company   900   tons   raw 

materials,  $27,000. 

Paid  freight  on  3,000  tons  raw  materials,  $750. 

Sold    John    Bruce    2,000    cases    finished    goods, 
$25,000. 

Sold    Y.    Valentine    5,000    cases    finished    goods, 
$62,500. 

Received  bill  of  Armstrong  &  Company  for  adver- 
tising, $25,000. 

Paid  Armstrong  &  Company  $50,000  on  account. 

Paid  for  postage  stamps,  $100;  traveling  expenses 
to   Newark  and  return,   $5;    entertaining  cus- 
tomers, $10. 
C,  NC,  D.,  GL.  Discounted  bur  note  for  60  days,  $40,000;    Dis- 

count $400,  Net  Cash  $39,600. 

,    17 


c 

,  NC 

.,GL 

s., 

,A., 

FG. 

s., 

,  A., 

FG. 

p. 

,  A., 

S. 

c 

,  NC 

.,Cr. 

L. 

PC.,T. 

,  P., 

TE 

SE. 

1 7th. 
PC,  T.,  FE.  Paid    for    scrubbing    factory,    washing    windows, 

etc.,  $150. 
P.,  A.,  S.  &  P.  Received  Nesbitt  &  Co.'s  bill  for  stationery,  $520. 

i8th. 
S.,  A.,  FG.  Sold    Ezra   Wheeler   4,000    cases   finished   goods, 

$50,000. 
S.,  A.,  FG.  Sold    Mark    Lane    4,000    cases    finished    goods, 

$50,000. 

19th. 
C,  NC,  GL.  ■  Paid  for  Labor,  $25,500;    Stable  Expense,  $150; 

Heat  and  Power,  $150;    Superintendent,  $250; 
Office  Salaries,  $300;    Arnold,  $500;    B.   Burt, 

$250. 

22nd. 
C,  NC,  GL.  Paid  insurance  premium,  $1,875. 

P.,  A.,  PM.  Purchased  of  Johnson  &  Company  2,000  packing 

cases,  $6,600. 
C,  NC,  GL.  ■   Paid  our  note  due  this  day,  $10,000. 

23rd. 
S.,  A.,  FG.  Sold    Mark    Lane    3,000    cases    finished    goods, 

$37,500- 

25th. 
S.,  A.,  FG.  Sold  Matthew  Maine  4,000  cases  finished  goods, 

$50,000. 
C,  NC,  D.,  Cu.  L.       John   Lyon  paid  his  bill  of   15th,   $24,250;    dis- 
count, $750. 
C,  NC,  D.,  Cu.  L.       Matthew  Maine  paid  his  bill  Feb.   21st,  $12,375; 

discount,  $125. 

28th. 

C,  NC,  D.,  Cu.  L.       Thomas    Fast    paid    his   bill    Feb.    24th,    $6,125; 

discount,  $125. 
C,  NC,  GL.  Paid  for  Labor,   $23,000;    vSuperintendent,  $250; 

Office  Salaries,  $300;    Heat  and  Power,  $150; 

Stable    Expense,    $150;     Arnold,    $500;     Burt, 

$2,000. 
P.,  A.,  SE.  Received  Jansen  &  Co.'s  bill  for  care  of   horses, 

$250. 
Close  the  books  for  the  month  of  March  by  making 

summary  entries  and  take  off  a  trial  balance. 

TRL\L  BALANCE. 

March. 

LaV^or $102,100.00 

Superintendence..  1,750.00 

Raw  Materials.. .  265,250.00 

18 


Packing  Mate- 

rials  

$44,450.00 

Heat  and  Power. . 

4,320.00 

Factory  Expense. 

230.00 

Freight 

1,270.00 

Cartage 

750.00 

Insurance 

1,875.00 

Stable  Expense. . . 

1,650.00 

Postage 

270.00 

Advertising 

73,070.00 

Traveling  Ex- 

pense.  

105.00 

Office  Salaries. .  .  . 

2,100.00 

Stationery  and 

Printing 

2,132.50 

Sundry  Expense. . 

12.50 

Discounts  Lost.  .  . 

2,772.90 

Discounts  Gained. 

$368.00 

Saks 

608,125.00 

Cash 

32,405.10 

Customers'  Con- 

trolHng  Account 

501,875.00 

Real  Estate 

80,000.00 

Horses,  Wagons 

and  Harness .  .  . 

7,510.00 

Machinery  and 

Tools..' 

30,810.00 

Notes  Payable. . .  . 

210,000.00 

Creditors'  Con- 

trolling Account 

189,965.00 

Furniture  and 

Fixtures 

5,000.00  . 

A.  Arnold's  Cap- 

ital  

50,000.00 

B.  Burt's  Capital. 

80,000.00 

A.  Arnold's  Draw- 

ings  

13,500.00 

B.  Burt's  Draw-  . 

ings 

9,750.00 

$1,161,708.00 

$1,161,708.00 

Close  the  nominal  accounts  into  Manufacturing, 
Trading,  and  Profit  and  Loss  Accounts,  creating 
Reserves  for  Bad  Debts  3  per  cent.,  and  Dis- 
counts I  per  cent,  on  Outstanding  Customers' 
Accounts;  Depreciation  on  Furniture  and  Fix- 
tures, 10  per  cent. ;  Horses,  Wagons  and  Harness, 
15  per  cent.;  Machinery  and  Tools,  5  per  cent.; 
Tax  on  Real  Estate,  2f  per  cent,  on   assessed 

19 


valuation  of  $60,000.     Inventory  of  goods  on 
hand,  $35,000. 
Percentages  are  to  be  figured  on  the  rate  per  annum 
and    apportioned  according    to    the    period    of 
closing  the  books . 


CLOSING  ENTRIES. 


Manufacturing  Account   $420,964.25 
To  Raw  Materials 

$265,250.00 

Labor 

102,100.00 

Superintendence. . .  . 
Packing  Mate- 

1,750.00 

rials 

Heat  and  Power. . .  . 

44,450.00 
4,320.00 

Factory  Expense .  .  . 

Freight 

Cartage 

Insurance 

230.00 

1,270.00 

750.00 

312.50 

Depreciation  Ma- 
chinery and  Tools. 
Reserve  for  Taxes. . . 

256.75 
275.00 

To  Close. 

Discounts  Gained 368.00 

Inventory 35,000.00 

Trading  Account  (cost 
of  manufactured 

goods) 385,596.25 

To  Manufac- 
turing Account 

To  Close. 

Sales  Account 608,125.00 

To  Trading 
Account 

Transfer  of  Accounts. 

Discount  Lost 5,018.75 

To  Discount  Lost  Reserve 
I  per  cent,  on  uncollected 
accounts 

Trading  Account $222,528.75 

To  Discounts  Lost  (on  sales) 

Traveling  Expense 

Advertising 

Stable  Expense 

Depreciation    Horses,    Wagons 

and  Harness 

Profit  and  Loss  Account   (bal- 
ance)  


420,964.25 


608,125.00 


5,018.75 


6,768.75 

105.00 

12,178.33 

1,650.00 

187.75 
201,638.92 


20 


Profit  and  Loss $201,638.92 

To  Office  Salaries $2,100.00 

Stationery  and  Printing 2,132.50 

Postage 270.00 

Discounts  Lost  (on  loans) 1,022.90 

Sundry  Expense 12.50 

Depreciation      Furniture      and 

Fixtures 83.33 

Reserve  for  Bad  Debts 15,056.25 

A.  Arnold's  Satoy 2,000.00 

A.  Arnold's  Interest '.  .  500.00 

B.  Burt's  Interest , 800.00 

A.  Arnold  50  per  cent.  Profit. . .  88,830.72 

B.  Burt  35  per  cent.  Profit 62,181.50 

C.  Conant  15  per  cent.  Profit. . .  26,649.22 

The  trading  account  item  of  trade  discounts  lost 
on  sales,  $6,768.75,  is  made  up  of  discounts 
allowed  customers,  shown  in  the  discount 
column  of  the  Cash  Book,  amounting  to  $1,750, 
and  $5,018.75  reserve  for  discounts. 

The  discounts  on  loans  are  shown  in  the  discount 
column  of  the  Cash  Book. 

Arnold  retires,  selling  his  interest  in  the  business 
for  a  bonus  of  $50,000,  in  addition  to  his  capital 
invested.  Arnold  agrees  to  take  the  new  firm's 
note  for  $50,000,  and  for  his  capital  he  is  to 
receive  $25,000  in  cash,  and  the  balance  when 
the  affairs  of  the  firm  are  Hquidated.  Burt  & 
Conant  are  to  divide  in  equal  shares  the  balance 
of  cash  remaining  to  the  credit  of  the  firm.    Burt 

.  &  Conant,  by  mutual  consent  of  all  parties 
in  interest,  are  to  take  over  the  Inventory, 
Horses,  Wagons  and  Harness,  Machinery  and 
Tools,    Furniture    and   Fixtures,    Real    Estate, 

^  Advertising  Contracts,  and  unexpired  Insurance 
at  their  book  value  less  the  reserve  funds  for 
depreciation,  and  assume  the  liabilities  for 
taxes,  in  consideration  of  the  reserve  fund  set 
aside  to  meet  it.  They  also  undertake  to  col-, 
lect  the  book  accounts  and  pay  off  the  liabili- 
ties of  the  old  firm. 

In  the  collection  of  accounts  all  were  paid  without 
discount  with  the  exception  of  Ezra  Wheeler, 
who  failed,  and  from  whom  nothing  could  be 
recovered.  Loss,  $62,500.  Clerks'  salary  and 
sundry  expenses  of  winding  up  the  business, 
$5,266.67. 


21 


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REALIZATION  AND  LIQUIDATION  ENTRIES.  ; 

Realization  and  Liqui- 
dation      $722,649.17 

•  To  charge  the  Reali- 
zation Account  with 
the  assets  of  the 
firm,  viz:  Book  Ac- 
counts, $501,87  5;  In- 
ventory, $35,000; 
Real  Estate,$8o,ooo; 
Horses,  Wagons  and 
Harness,  $7,510; 

Machinery  andTools, 
$30,810;  Furniture 
and  Fixtures,  $5,000 ; 
Insurance,  $1,562.50; 
Advertising,  $60,- 
891.67. 

To  Adjustment  Ac- 
count      $722,649.17 

Adjustment  Account 
is  credited  that  the 
contra  debit  may  be 
made  without  dis- 
turbing the  accounts 
representing  assets, 
which  remain  open 
upon  the  books. 

Adjustment  Account. .     $420,842.83 

Adjustment  Account 
is  charged  with 
the  total  liabilities 
of  the  firm  to  permit 
the  contra  entry,  to 
the  credit  of  Reali- 
zation and  Liquida- 
tion, to  be  made 
without  disturbing 
the  accounts  rep- 
resenting liabiHties 
which  remain  open 
on  the  books. 

To     ReaHzation     and 

Liquidation $420,842.83 

To  credit  the  above  ac- 
count with  the  lia- 
bilities of  the  firm, 
viz:  Notes  Payable, 
$210,000;    Accounts 

23 


Payable,  $189,965; 
Reserve  Tax,  $275; 
Reserve  for  Bad 
Debts,  $15,056:25; 
Reserye  for  Dis- 
counts, $5,018.75; 
Depreciation  Horses, 
Wagons  and  Har- 
ness, $187.75;  Ma- 
chinery and  Tools, 
$256.75;  Furniture 
and  Fixtures,  $83.33. 
Burt  &  Conant $220,774.17 

Pursuant  to  the  terms 
of  the  liquidation 
agreement  Burt  & 
Conant  purchased  of 
Arnold,  Burt  & 
Conant  the  follow- 
ing assets:  Horses, 
Wagons  and  Har- 
ness, $7,510;  Real 
Estate,  $80,000;  In- 
ventory ,  $35,000; 
Machinery  and  Tools, 
$30,810;  Furniture 
and  Fixtures,  $5,000; 
Insurance,  $1,562.50; 
Advertising,  $60,- 
891.67. 


To  Realization  and 

Liquidation $220,774.17 

Credited  to  this  ac- 
count to  record  the 
sale  of  the  above  as- 
sets (which  have 
been  charged  to  this 
account  by  a  former 
entry),  and  showing 
the  full  book  value 
to  have  been  real- 
ized by  the  sale. 


J.                                     Realization  and  Liqui- 
dation   $802.83 

Charged  to  Realiza- 
tion and  Liquidation 
Account  as  a  contra  # 

charge  to  the  same 
items  credited  by  a 

24 


former  entry,  show- 
ing the  assumption 
by  Burt  &  Conant 
of  the  liability  for 
taxes,  $275,  and  the 
appropriation  b  y 
them  of  the  undivi- 
ded profits,  set  aside 
by  Arnold,  Burt  & 
Conant  as  deprecia- 
tion reserves. 


To  Burt  &  Conant.  .  .  .  $802.83 

Under  the  terms  of  the 
sale  to  Burt  &  Co- 
nant of  the  sundry 
assets,  referred  to  in 
the  preceding  entry, 
the  vendees  are  en- 
titled to  the  undivi- 
ded profits  set  aside 
by  the  vendors 
as  reserves  against 
depreciation  in 
Horses,  Wagons  and 
Harness,  $187.75; 
Machinery  and  Tools, 
$256.75;  Furniture 
and  Fixtures,  $83.33  i 
Tax  HabiHty,  $275. 


Adjustment  Account. .     $220,774.17 

The  following  assets, 
having  been  sold  and 
charged  to  the  ac- 
count of  Burt  & 
Conant,  still  remain 
as  open  accounts  on 
the  ledger,  and  are  by 
this  entry  transfer- 
red to  Adjustment 
Account  to  take 
them  off  the  books. 


To  Horses,  Wagons 

and  Harness.  ...        $  7,510.00 

Real  Estate 80,000.00 

Inventory 35,000.00 

Machinery  and 

Tools 30,810.00 

Furniture  and 

Fixtures 5,000.00 

25 


J- 


Insurance 

Advertising 

$1,562.50 
60,891.67 

Sund] 

ries. 

To  Adjustment  Account 

Reserve  for  Bad  Debts..          15,056.25 
*'     Discounts...            5,018.75 
"     Horses, 
*                     Wagons 
and  Har- 

20,877.83 

<( 

< 
< 

ness 187.75 

'     Machinery 

and  Tools.              256.75 

'     Furniture 
and  Fix- 
tures                  83.33 

*     Tax. 275.00 

With  the  exception  of  Reserve  for  Bad  Debts 
and  Discounts  these  undivided  profits  were 
transferred  to  Burt  &  Conant;  they  are  now 
transferred  to  the  Adjustment  Account  to 
close  them  out.  The  reserve  for  bad  debts  is 
also  transferred  as  it  is  carried  as  a  reserve  in  • 
the  Realization  and  Liquidation  Account  where 
it  will  serve  the  purpose  for  which  it  was 
created,  viz:  as  an  insurance  against  possible 
losses. 

The    student    will    now    arrange    the  Cash   Book 
headings  to  facilitate  postings  as  follows: 


CASH  BOOK,  DEBIT  SIDE. 


Net  Cash. 
Burt  &  Conant,  Dr. 
To  Realization  and 
Liquidation. 


Creditors. 
Adjustment,  Dr. 

To  Sundry  Customers' 
Controlling  Acc't. 


CASH  BOOK,  CREDIT  SIDE. 


Net  Cash. 

Realization  and 
Liquidation 
Dr.  to  Burt 
&  Conant. 


Creditors  % 

S.  Cr.  C. 
Dr.  To  Ad- 
justment. 


General  Ledger 

Partners  Dr. 
To  Cash. 


C,  GL. 

only 


C,  GL. 


Paid  A.  Arnold,  $25,000;  B.  Burt,  $3,702.55;  C. 
Conant,  $3,702.55;  according  to  the  terms  of 
the  liquidation  agreement  as  to  the  cash  bal- 
ance. Use  the  general"  ledger  column  only; 
charge  partners  and  credit  cash. 

Balance  of  cash  brought  forward,  $32,405.10. 

26 


C,  NC,  Cu.  The    customers    pay    their    accounts    as    follows: 

Smith,  $25,000;  Oliver,  $18,750;  Lane,  $100,000; 
Maine,  $62,500;  Patterson,  $15,625;  Bigelow, 
$28,125;  Welling,  $65,625;  Bruce,  $37,500; 
Ireland,  $12,500;  Bunce,  $6,250;  Armitage, 
$5,000;  Valentine,  $62,500. 
Post  the  above  to  the  credit  of  the  several  cus- 
tomers' accounts  from  the  Cash  Book.  The  to- 
taj,  $439,375.00,  is  to  be  posted  in  accordance 
with  the  altered  heading  of  the  columns  of  the 
Cash  Book. 

C,  NC,  Cr.  The  following  creditors  of  the  firm  are  paid  off  by 

Burt  &  Conant,  viz:  Bogota  Machine  Co., 
$15,160;  Office  Supply  Co.,  $2,500;  Howard 
Coal  Co.,  $1,350;  Sommerville  Paper  Box  Co., 
$25,000;  Burt,  $600;  Nesbitt,  $520;  Wal- 
lace, $6,000;  Johnson,  $7,500;  Armstrong, 
'■  $23,070;  Herzog,  $245;  Bennett,  $70;  Mead, 
$75,000;  Cook,  $450;  Sanger,  $5,000;  Drake, 
$27,000;  Jansen  &  Co.,  $500.  Foot  the  cash  col- 
umns here,  $189,965.00.  Notes  Payable,  $210,000. 

C,  NC.  only.  Sundry  Expenses,  $5,266.67. 

Add  both  cash  columns  again;  total  net  cash  col- 
umn, $405,-231.67.  Creditors'  column,  $399,965. 
Post  the  footings  as  follows:  Charge  Realization 
and  Liquidation,  $405,231.67.  Credit  Burt  &; 
Conant.  Charge  Sundry  Creditors'  Controlling  Ac- 
count, $189,965.00.  Notes  Payable, $2 10,000.00. 
Credit  Adjustment  Account,  $399,965.00. 

C.,^GL.  Credit  Burt  &  Conant,  $105,984.88,  advances  of 

May  5th,  1907. 

C,  GL.  Charge    A.     Arnold,     $105,984.88.       Paid    as    of 

May  5th. 

J.  A.  Arnold  Drawing  Account  $79,830.72 

B.  Burt  Drawing  Account.       69,028.95 

To  A.  Arnold  Capital  Account $79,830.72 

B.  Burt  Capital  Account 69,028.95 

Transfer  of  Balances. 

J.  Adjustment  Account. ..  .      $62,500.00 

To     Sundry     Customers'      Control- 
ling   Account $62,500.00 

Bad  debt  of  Ezra  Wheeler. 

Sundries. 

A.  Arnold  50  per 

cent,  of  loss 23,845.84 

B.  Burt  35  per  cent. 

of  loss. 16,692.08 

C.  Conant  15  per 

cent,  of  loss 7.153-75 

To  Realization  and  Liquidation. ...        47,691.67 

27 


Division  of  loss  attending  liquidation. 

Burt  &  Conant $50,000.00 

To  A.  Arnold $50,000.00 

Sale  to  Burt  &  Conant  of  a  one-half  interest  in 
good  will,  pursuant  to  the  terms  of  the  liquida- 
tion agreement. 

A.  Arnold 50,000.00 

To  Burt  &  Conant 50,000.00 

Note  in  settlement  of  good  will  as  per  agreement. 

B.  Burt 132,336.87 

C.  Conant 15,792.92 

To  Burt  &  Conant. 148,129.79 

Transfer  of  Accounts. 


28 


REALIZATION  AND  LIQUIDATION 

OF 

ARNOLD,  BURT  &  CONANT 
March  28th,  1907. 


Ledger  Account. 


Book  Accounts $501,875.00 

Inventory 35,000.00 

Real  Estate 80,000.00 

Horses,    Wagons    and 

Harness 

Machinery  and  Tools. . 
Furniture  and  Fixtures 
Insurance 


7,510.00 

30,810.00 

5,000.00 

1.56.2.50 


Advertising 60,891.67 


Notes  Payable $210,000.00 

Accounts  Payable.. .  .  189,965.00 

Reserve  for  Taxes.. . .  275.00 

Bad  Debts..  15,056.25 

Discounts.  .  .  5,018.75 

"        Depreciation 

Horses, W. 

and  H.  .  .  .  187.75 
' '        Machinery 

and  Tools.  256.75 
"        Furniture  and 

Fixtures.  .  83.33 


Total $722,649.17 


Total $420,842.83 


Burt   &   Conant    Tax.  275.00 
"       "       "      Horses, 

Wagons  and  Harness  187.75 

Burt    &    Conant    Ma- 
chinery and  Tools..  .  256.75 

Burt    &    Conant    Fur- 
niture and  Fixtures. .  83.33 

Cash,  Creditors  Accts.  .  399,965.00 

Expenses 5,266.67 


$1,128,683.67 


Burt    &    Conant    In- 
ventory        35,000.00 

Burt  &  Conant  Real 

Estate 80,000.00 

Burt  &  Conant  Horses, 
Wagons  &  Harness         7,510.00 

Burt  &  Conant  Ma- 
chinery and  Tools. .       30,810.00 

Burt  &  Conant  Fur- 
niture and  Fixtures         5,000.00 

Burt    &    Conant    In- 
surance   1,562.50 

Burt  &  Conant  Ad- 
vertising         60,891.67 

Cash,  Customers. . .  •  •     439>375-oo 
Total $1,080,992.00 

A.  Arnold  50  per  cent. 

of  loss 23,845.84 

B.  Burt  35  per  cent,  of 

loss 16,692.08 

C.  Conant  15  per  cent. 

of  loss 7>i53-75 

$1,128,683.67 


29 


PART  II 


Part  2. 

Burt  &  Conant. 

April.  * 

Books  to  be  Opened. 

General   Ledger,    Customers'    Ledger,    Creditors'    Ledger,    Sales    Book, 
Petty  Cash  Book,  Purchase  Book,  Cash  Book,  Journal,  Cost  Ledger. 

ACCOUNTS  TO  BE  OPENED  IN  THE  GENERAL  LEDGER. 


FOLIO. 


FOLIO. 


I  Arnold,  Burt  &  Conant,  in  Liqui-       8 

dation. 
I  A.  Arnold.  8 

I  B.  Burt. 

1  C.  Conant. 

2  Real  Estate. 
2  Machinery  and  Tools. 
2  Horses,  Wagons  and  Harness. 

2  Furniture  and  Fixtures. 

3  Goodwill. 
3  Notes  Receivable. 
3  Leasehold  Property. 

3  Cash. 

4  Petty  Cash. 
4  Missouri  Pacific  Stock. 
4  Raw  Material. 

4  Coal. 

5  Packing  Materials. 
5  Engine  Supphes. 
5,  Sundry  Customers'  ControlHng 

Account. 

5  Finished  Goods. 

6  Notes  Discounted. 
6  Considerations  for  Endorsed  Notes 
6  Loans. 

6  Notes  Payable. 

7  Rates  and  Taxes. 
7  Discounts  Gained. 
7  Sundry  Creditors'  Controlling  Ac- 
count. 

7  Finished  Goods  Sales. 

8  Depreciation  Machinery  and  Tools. 


Depreciation  Horses,  Wagons 

and  Harness. 
Bad  Debts. 
Depreciation  Furniture  and 

Fixtures. 
Reserve  Raw  Materials. 
Cable  and  Telegrams. 
Repairs  to  Machinery. 
Discounts  Lost. 
Postage. 

Stationery  and  Printing. 
Factory  Expense. 

10  Sundry  Expense. 

11  Stable  Expense. 
Office  Salaries. 
Superintendent. 
Productive  Labor. 
Engineer  and  Fireman. 
Advertising. 
Insurance. 
Accrued  Interest. 
Missouri  Pacific  Dividend. 
Silas  Wilcox. 
Sam  Lewis. 

Specialty  Manufacturing  Co. 
Capital  Stock,  Specialty  Co. 
Debenture  Bonds,  Specialty 

Co. 
Trading. 
Profit  and  Loss. 


II 
II 
II 

12 
12 
12 
12 
13 
13 
13 
13 
14 
14 


32 


ACCOUNTS  TO  BE  OPENED  IN  THE  COST  LEDGER. 

Folios  I  and  2. 

Columns  from  left  to  right. 

Operating  Account. 

Vouchers,  Total,  Productive  Labor,  Unproductive  Labor,  Factory  Ex- 
pense, Repairs  to  Machinery,  Stores,  Coal,  Raw  Material,  Insurance, 
Depreciation,  Rates  and  Taxes,  Discounts  Lost,  Advertising,  Stable 
Expense,  Sundries,  Engineer  and  Fireman,  Administration  Expense. 

Folio  3. 
Stores. 
Columnar  Headings. 
Vouchers,  Total,  Packing,  Heat  and  Power,  Inventory. 

Folio  3. 
Fuel. 

Vouchers,  Total,  Consumed. 

FoHo  4. 
Raw  Materials. 
Vouchers,  Total,  Consumed. 

FoHo  5. 
Items  in  Suspense. 
Vouchers,  Total,  Labor,  Insurance,  Factory  Expense,  Rates  and  Taxes, 
Depreciation,  Stable  Expense. 

FoHo  6. 
Heat  and  Power. 
Vouchers,  Total,  Coal,  Stores,  Repairs,  Engineer  and  Fireman. 

FoHo  7. 
Grinding. 
Vouchers,  Total,  Labor,  Coal,  Stores,  Repairs,  Engineer  and  Fireman. 

FoHo  7. 
Mixing. 
Vouchers,  Total,  Labor,  Coal,  Stores,  Repairs,  Engineer  and  Fireman. 

Folios. 

Drying. 
Vouchers,  Total,  Labor,  Coal,  Stores,  Repairs,  Engineer  and  Fireman. 

FoHo  8. 

Packing. 
Vouchers,  Total,  Labor,  Coal,  Stores,  Repairs,  Engineer  and  Fireman. 

FoHo  9. 

Trading. 
Vouchers,  Total,  Advertising,  Discount. 

33 


Folio  9. 
Administration. 
Vouchers,  Total,  Salaries,  Postage,  Cables,  Stationery,  Sundries,  Depre- 
ciation, Discounts. 

Folios  13  and  14. 
Summary  of  Finished  Goods  Cost. 
(Blank)     Total,  Labor,  Superintendence,  Coal,  Engineer  and  Fireman, 
Depreciation,  Stores,  Rates  and  Taxes,  Insurance,  Stable  Expense, 
Raw  Materials,  Factory  Expense,  Repairs. 

ist. 

B.  Burt  and  C.  Conant  commence  business  with 
a  capital  of  $225,000,  $150,000  of  which  is  con- 
tributed by  Burt  and  $75,000  by  Conant.  In- 
terest to  be  allowed  on  the  excess  and  charged 
on  the  deficiency  of  the  capital  of  each  partner 
beyond  or  under  $100,000.  Profits  and  losses 
to  be  divided  in  the  ratio  of  5  and  4  respec- 
tively. 

2d. 

C,  NC,  GL.  Burt  pays  into  the  firm  $25,000. 

C,  NC,  GL.  Conant  pays  into  the  firm  $50,000. 

J.  Received  from  Arnold,  Burt  &  Conant  in  Liqui- 

dation the  following  property:  Real  Estate, 
$80,000;  Raw  Material  (Inventory),  $35,000; 
Horses,  Wagons  and  Harness,  $7,322.25;  Fur- 
niture and  Fixtures,$4, 650;  Insurance,$i, 562. 50; 
Advertising,  $60,891.67;  Machinery  and  Tools,' 
$30,553.25;  Reserve  for  Taxes,  $275,  for  which* 
.  the  firm  assumes  the  tax  liability.  Make  the 
Journal  entries  as  follows: 

Sundries. 

To  Arnold,      Burt      &  . 
Conant    in    Liqui- 
dation      $219,979.67 

Representing  the 
value  of  the  as- 
sets sold  by  the 
above  mentioned 
firm  to  Burt  & 
Conant  and  to  be 
placed  upon  the 
books  of  the  new 
firm  under  the 
following  cap- 
tions: 
Real  Estate ,  .  .       $80,000.00 

34 


Raw     Materials     (In- 
ventory)        $35,000.00 

Horses,    Wagons    and 

Harness 7,322,25 

Machinery  and  Tools. .         3o>553-25 
Furniture  and  Fixtures  4,650.00 

Insurance 1,562.50 

Advertising 60,891.67 

Arnold,    Burt    &    Co- 

nant,  in  Liquidation  275.00 

To  Reserve  for  Rates 

and  Taxes $275.00 

Reserve  set  aside  by  Arnold,  Burt 
&  Conant  to  meet  Rates  and 
Taxes  accrued  but  not  due,  the 
liability  being  assumed  by  the  firm 
of  Burt  &  Conant. 
C,  NC,  GL.  Paid  on  account  of  the  HabiUties  of  Arnold,  Burt 

&  Gonant  in  Liquidation,  $19,010. 
J.  Gave  firm's  note  to  A.  Arnold  for  $50,000,  as  per 

terms  of  Liquidation  agreement,  Journal  entry 
"as  follows: 

Good  Will $50,000.00 

To  A.  Arnold $50,000.00 

Paid  Arnold  for  his  interest  in  the 
good  will  of  the  firm  as  set  forth  in 
the  Liquidation  agreement. 

A.  Arnold $50,000.00 

To  Notes  Payable $50,000.00 

Note  given  in  payment  of  good  will. 

3rd. 

P.,  A.,  M.  &  T.  Purchased  of  the  Bogota  Machine  Company  addi- 

tional machinery  for  $6,000. 

P.,  A.,  S.  Purchased  of  the  Office  Supply  Company  furniture 

and  fixtures,  $1,000. 

4th. 

P.,  A.,  C.  Purchased  of  the  Howard  Coal  Company  30  tons 

of  coal,  $90;  Voucher  No.  3.  Also  enter  this 
voucher  in  the  Cost  Ledger,  first  in  the  Oper- 
ating Account,  under  the  Total  column,  and 
Coal.  Again  in  the  Coal  Fuel  Account  under 
Total. 

P.,  A.,  ES.  Purchased  of  B.  Jones  oil  and  waste,  $10;  Voucher 

No.  4.  Post  into  the  Cost  Ledger  in  Operating 
Account  under  columns  for  Total  and  Stores, 
and  again  in  Stores  Account  under  Total 
column  only. 

35 


5th. 

C,  NC,  GL.  Purchased  lease  having  one  year  to  run  with  privi- 

lege of  renewal  for  ten  years  and  paid  $3,600 
cash  for  it. 

P.,  A.,  RM.  Purchased  of  C.  WilHams  20  tons  of  raw  material, 

$1,000;  Voucher  No.  5.  Also  post  this  item 
into  the  Cost  Ledger,  first  in  the  Operating  Ac- 
count under  Total  and  Raw  Materials,  and 
again  in  Raw  Material  Account  in  Total  column 
only. 

P.,  A.,  PM.  Purchased  of  L.  Mead  1,000  lbs.  packing   paper, 

$30;  Voucher  No.  6.  (Also  post  into  Cost 
Ledger  under  the  same  accounts  and  columns 
as  Voucher  No.  4.) 

P.,  A.,  PM.  Purchased  of  Sommerville  Paper  Box  Co.  225,000 

boxes,  $1,000;  Voucher  No.  7.  (Post  again  in 
Cost  Ledger  under  the  same  accounts  as  Voucher 
No.  6.) 

P.,  A.,  RM.  Purchased  of  Paul  Burt  3  tons  of  raw  material, 

$180;  Voucher  No.  8.  (Post  in  Cost  Ledger  as 
per  Voucher  No.  5.) 

6th. 

C,  NC,  GL.  Paid  Engineer  and  Fireman,  Voucher  No.  9,  $30. 

(Cost  Ledger,  Operating  Account,  Total  and 
Engineer  and  Fireman;  again  in  Heat  and 
Power  Account,  Total  and  Labor  columns.) 

C,  NC,  GL.        •  Paid  Factory  Hands,  Voucher  No.  10,  $50.     (Cost 

Ledger,  Operating  Account,  Total  and  Labor; 
Grinding,  Total  and  Labor,  $12.50;  Mixing, 
Total  and  Labor,  $12.50;  Drying,  Total  and 
Labor,  $12.50;  Packing,  Total  and  Labor, 
$12.50.) 

C,  NC,  GL.  Paid  B.  Burt,  $100. 

9th. 

C,  NC,  GL.  Paid  on  account  of  liabilities  of  Arnold,  Burt  & 

Conant  in  Liquidation,  $39,620. 

P.,  A.,  S.  Purchased  of  Tattersall  &  Company,  horse,  wagon 

and  harness,  $1,400. 

C,  NC,  GL.  Paid  on  account  Arnold,  Burt  &  Conant  in  Liqui- 

dation, $98,835. 

P.,  A.,  PM.  Purchased  of  Silas   Herring   200   packing    cases, 

$60;  Voucher  No.  11.  (Cost  Ledger,  Oper- 
ating Account,  Total  Stores,  Stores  Account, 
Total  only.) 

S.,  A.,  FGS.  Sold  Isaac  Smith  200  cases  finished  goods,  $2,500. 

S.,  A.,  FGS.  Sold  A.  Oliver  100  cases  finished  goods,  $1,250. 

C,  NC,  GL.  .        Received    on    account    Arnold,    Burt    &    Conant 

in  Liquidation,  $439,375. 

36 


UNIVERSITY  ^^ 

OF 

£^iF03m^  nth. 

C,  NC,  GL.  Purchased  400  shares  Missouri  Pacific  stock  at  102, 

$40,800. 
C,  NC,  GL.  Borrowed  on  our  note  at  3%   $20,000,  pledging 

300  shares  Missouri   Pacific  stock  as  security. 

Mercantile     Trust     Company.       (Credit     Loan 

Account.) 

12th. 

C,  NC,  GL.  Paid  on   account  of  Arnold,   Burt  &   Conant  in 

Liquidation,  Clerks  and  General  Expenses, 
$5,000. 

C,  NC,  GL.'  Paid  on  account  of  Arnold,   Burt  &   Conant  in 

Liquidation,  $242,500. 

P.,  A.,  S.  &  P.  Received  bill  of  Geo.   F.   Nesbitt  &  Co.   for  sta- 

tionery, $300. 

P.,  A.,  RM.  Purchased  of  Gus  Wallace  &  Co.    20    tons    raw 

material,  $1,200;  Voucher  No.  12.  (Cost 
Ledger,  Operating  Account,  Total  and  Raw 
Material;   Raw  Material  Account,  Total  only.) 

P.,' A.,  M.  &  T.  Purchasedof  Bogota  Machine  Co.,  machinery,  $130. 

P.,  AS.  Received  of  John   Horn  bill   for  repairs  to  ma- 

chiilery,  $25;  Voucher  No.  13.  (Cost  Ledger, 
Operating  Account,  Total  Repairs  to  Machin- 
ery. Heat  and  Power  Account,  Total  and 
Repairs,  $10;  Drying  Account,  Total  and 
Repairs,  $15.) 

S.,  A.,  FG.  .      Sold  George  Bigelow  50  cases  finished  goods,  $625. 

P.  C,  T.,  P.  Paid  for  postage  stamps,  $6. 

P.,  A.,  PM.  Purchased  of  Johnson  &  Co.    1,000  packing  cases, 

$300;  Voucher  No.  14.  (Cost  Ledger,  Operating 
Account,  Total,  Stores;  Stores  Account,  Total 
only.) 

P.  C,  T.,  FE.  Paid  for  brooms,  soap,  towels,  for  factory  use,  $10; 

Voucher  No.  14  A.  (Cost  Ledger,  Operating 
Account,  Total  and  Factory  Expense.  "Items 
in  Suspense"  Account,  Total  and  Factory 
Expense.) 

C,  NC,  GL.  Charge  Petty  Cash  Account  with  $60.     This  sum 

is  to  remain  charged  on  the  ledger  as  "impressed 
cash."  As  it  is  disbursed  the  petty  cashier 
surrenders  his  vouchers,  which  are  charged  off 
in  the  General  Cash  Book  to  the  debit  of  the 
several  accounts  and  their  total  sum  in  cash  is 
paid  to  the  petty  cashier,  who  then  has  the 
original  sum,  $60,  in  his  possession. 

S.,  A.,  FG.  Sold   Frank   Patterson    50   cases   finished   goods, 

$625. 

13th. 

No  entry.         •  Endorsed  notes  for  Silas  Wilcox  for  $20,000  in 

consideration  of  1%. 

37 


C,  NC,  GL.  Received  check  from  Silas  Wilcox,  $200. 

P.,  A.,  RM.  Purchased  of  Selleck  &  Co.  6  tons  raw  material, 

$150;  Voucher  No.  15.  (Cost  Ledger,  Operatingf 
Account,  Total  and  Raw  Material.  Also  Raw 
Material  Accounts,  Total  only.) 

C,  NC,  Cred.  Paid  Howard  Coal  Co.,  $90.  • 

C,  NC,  D.,  Cr.  Paid  C  Williams,  $490;   discount,  $10. 

C,  NC,  D.,  Cr.  Paid  Sommerville  Paper  Box  Co.,  $950;   discount, 

$50- 

C,  NC,  GL.  Paid    Wages,    Voucher    No.    16,    $1,900.      (Cost 

Ledger,  Operating  Account,  Total  Labor;  also 
Grinding,  Total  and  Labor,  $68.75;  Mixing, 
Total  and  Labor,  $40.63;  Drying,  Total  and 
Labor,  $40.63;  Packing,  Total  and  Labor, 
$1,749.99.) 

C,  NC,  GL.  Paid    Superintendent,    Voucher    No.     17,    $150. 

(Cost  Ledger,  Operating  Account,  Total,  Unpro- 
ductive Labor;  also  ''Items  in  Suspense," 
Total  Labor.) 

C,  NC,  GL.  Paid  Drivers,  Voucher  No.  18,  $30.    (Cost  Ledger, 

Operating  Account,  Total,  Stable  Expense; 
"Items  in  Suspense,"  Total,   Stable   Expense.) 

C,  NC,  GL.  Paid  Engineer  and  Fireman,  Voucher  No.  19,  $30. 

(Cost  Ledger,  Operating  Account,  Total,  En- 
gineer and  Fireman;  Heat  and  Power,  Total 
and  Labor.) 

C,  NC,  GL.  Paid  Office  Salaries,  Voucher  No.  20,  $60.     (Cost 

Ledger,  Operating  Account,  Total  Adminis- 
tration Expense;  Administration  Account, 
Total  Salaries.) 

C,  NC,  GL.  B.  Burt  drew  $100. 

P.  C,  T.,  P.,  S.  &  P.   Paid  for  pens,  $1.50;  postage,  $4. 

P.,  A.,  S.  Received  bill  of  Armstrong  &  Co.,  for  advertising, 

$1,014. 

No  entry.  Endorsed  note  of  Silas  Wilcox,  $70,000. 

C,  NC,  GL.  Received  check  for  $700  from  Wilcox. 

C,  NC,  GL,  Borrowed  on  note  at  the  Western  National  Bank, 

$12,000,  pledging  100  shares  Missouri  Pacific 
stock  as  security  in  part. 

i6th. 

P.,  A.,  C  Purchased  of  the  Howard  Coal  Co.  150  tons  coal, 

$450,  Voucher  No.   21.     (Post  in  Cost  Ledger 

as  before.) 
S.,  A.,  FG.  •   Sold  Lewis  Welling,  Trenton,  N.  J.,  50  cases  finished 

goods,  $625. 
S.,  A.,  FG.  Sold  John  Lyon,  Buffalo,  N.  Y.,  100  cases  finished 

goods,  $1,250. 
C,  NC,  Cr.  Paid  Geo.  F.'  Nesbitt  &  Co.,  bill  of  12th  inst.,  $300. 

38 


1 7th. 

S.,  A.,  FG.  Sold  James  Bruce  loo  cases  finished  goods,  $2,500. 

P.,  A.,  S.  Received  Armstrong  &  Co.'s  bill  for  advertising, 

$600. 

P.  C,  T.,  P.,  SP.  Paid  for  postage  stamps,  $4;  stationery,  $8. 

P.,  A.,  S.  Received  L.  Herzog's  bill  for  repairs  to  machinery 

$49;  Voucher  No.  22.  (Cost  Ledger,  Operating 
Account;  also  Grinding  Account,  $29,  Total 
and  Repairs;   Mixing,  $20,  Total  and  Repairs.) 

P.  C,  T.,  FE.  Paid  for  washing  factory  windows,  $6;    Voucher 

No.  23.  (Cost  Ledger,  Operating  Account,  Total 
Factory  Expense;  "Items  in  Suspense,"  Total 
and  Factory  Expense.) 

C,  NC,  Cr.  Paid  Bogota  Machine  Co.,  $3,000  on  account. 

C,  NC,  Cr.  Paid  Office  Supply  Co.,  $500. 

S.,  A.,  FG.  Sold  Ezra  Wheeler  200  cases  finished  goods,  $2,500. 

19th. 

C,  NC,  Cr.  Paid  bill  of  Tattersall  &  Co.,  $1,400. 

S.,  A.,  FG.  Sold  Lewis  WeUing  200  cases  finished  goods,  $2,500. 

P.,  A.,  M.  &  T.  Purchased  of  Bogota  Machine  Co.,  extra  knives, 

.      S32. 

2oth. 

C,  NC,  Cr.  Paid  bill  of  B.  Jones,  $10,  and  bill  of  L.  Mead, 

$30. 
S.,  A.,  FG.  Sold  Isaac  Smith  200  cases  finished  goods,  $2,500. 

C,  NC,  D.,  Cu.  .  Received  check  of  Isaac  Smith  for  bill  of  loth, 

$2,425;   discount,  $75. 
C,  NC,  GL.  Paid  Voucher  No.   24,  $2,050,  for  Wages.     (Cost 

Ledger,     Operating     Account,     Total,     Labor; 

Grinding    Account,    Total,    Productive    Labor, 

$40.62 ;  Mixing,  Total,  Productive  Labor,  $40.62 ; 

Drying,  Total,  Productive  Labor,  $40.62;   Pack- 
ing, Total,  Productive  Labor,  $1,928.14.) 
C,  NC,  GL.  Paid  Voucher  No.  25,  Superintendent,  $150.    (Cost 

Ledger,  post  as  before.) 
C,  NC,  GL.  Paid  office  salaries,  Voucher  No.  26,  $60.  (Post  in 

Cost  Ledger,  as  before.) . 
C,  NC,  GL.  Paid  Engineer  and  Fireman,  Voucher  No.  27,  $30. 

(Cost  Ledger,  post  as  previous  item  of  same 

character. ) 
C,  NC,  GL.  Paid  Drivers,  Voucher  No.  28,  $30.    (Cost  Ledger, 

post  as  before.) 
C.,NC,GL.  B.Burt,  $150. 

C,  NC,  Cr.  Paid  Silas  Herring's  bill  of  loth,  $60. 

S.,  A.,  FG.  Sold   Matthew   Maine    200   cases   finished  goods, 

$2,500. 


P^,  A.,  C.  Purchased  of  the  Howard  Coal  Co.,  150  tons  coal, 

$450.      (Post   in    the    Cost    Ledger    as   before, 
Voucher  No.  29.) 
P.,  A.,  PM.  Purchased  of  Johnson  &  Co.  1,000  packing  cases, 

$180;    Voucher  No.  30.     (Cost  Ledger,  post  as 
before.) 
C,  NC,  D.,  GL.  Discount  firm's  note  at  Fourth  National  Bank  for 

$2,000;   discount,  $10. 
J..  Received  Abraham  Oliver's  note  in  settlement  of 

bill  of  nth,  $1,250;  Jas.  Bruce's  note,  $2,500; 
Matthew  Maine's  note,  $2,500.  Journal  entry 
as  follows: 

Notes  Receivable ..   $6,250.00 

To  Abraham  OHver $1,250.00 

James  Bruce 2,500.00 

Matthew  Maine 2,500.00 

Notes  Received. 

24th. 

C,  NC,  D.,  GL.  Discounted    notes    of    Oliver,    Bruce    &    Maine, 

amounting  to  $6,250;  discount,  $74.58. 
Credit  Notes  Discounted  Account  with  $6,250. 
When  the  notes  are  paid  by  the  makers,  Notes 
Discounted  is  debited  and  Notes  Receivable 
credited.  This  enables  the  accountant  to  ascer- 
tain the  contingent  liability  on  outstanding 
notes  endorsed  by  the  firm. 

P.,  A.,  RM.  Purchased  of  C.  Williams  100  tons  raw  material, 

$9,000,  60  day  note;  Voucher  No.  31.  (Cost 
Ledger,  post  as  before.) 

J.  Gave  C.  Williams  60  day  note  for  $9,000,  in  settle- 

ment of  account. 

S.,  A.,  FG.  Sold  John   Ireland   200   cases  finished  goods,   60 

days,  $2,500. 

S.,  A.,  FG.  Sold  Thomas  Fast  100  cases  finished  goods,  $1,250. 

25th. 

P.,  A.,  SE.  Received  Harry   Bennett's  bill  of  $14   for  horse 

shoeing;  Voucher  No.  32.  (Cost  Ledger,  Oper- 
ating Account,  Total,  Stable  Expense;  ''Items 
in  Suspense,"  Total,  Stable  Expense.) 

P.  C,  HW.  &  H.  Paid  $12.00  for  horse  blankets. 

P.  C,    S.,  C.  Paid  .50  for  matches;  cable  $4. 

S.,  A.,  FGS.  Sold    Geo.    Bigelow    200    cases    finished    goods, 

$2,500.    . 

27th. 

C.  NC,  GL.  '  Paid  Wages  Voucher  No.   33,  $2,100.     (Cost  Ac- 

count Ledger,  Operating,  Total,  Labor ;  Grinding, 
Total,  Labor,  $40.63;  Mixing,  $68.75;  Drying, 
,75;     Packing,   $1,921.87.)      Office   Salaries, 

40 


Voucher  34,  $60.  Engineer  and  fireman^ 
Voucher  No.  35,  $30;  Drivers,  Voucher  No.  36,. 
$30.  C.  Conant,  $100.  Superintendent,  $150. 
Voucher  No.  37. 

31st. 

S.  A.,  F.  G.  S.  Sold   Se3^mour   Bunce    100   cases   finished  goods^ 

.     $1,250. 

P.  A.,  S.  E.  Received  bill  of  Jansen  &  Co.  for  care  of  horse, 

$50;  Voucher  No.  38.  (Cost  Ledger,  Operating 
Account,  Total,  Stable  Expense;  "Items  in 
Suspense,"   Total  and  Stable  Expense.) 

C,  N.  C,  G.  L.  Drew  check  for  $56  for  petty  cash  disbursements. 

Transfer  petty  cash  footings  to  Cash  Book. 
Make  summary  entries  of  totals  in  Cash  Book,. 
Invoice  Book,  and  Sales  Book  or  post  direct  from 
the  footings  of  the  columns;    prove  the  Ledger 
postings  by  taking  off  a  trial  balance. 

SUMMARY  OF  BOOKS  OF  ORIGINAL  ENTRY. 

Purchase  Book  Pages  2  and  3. 

Sundries. 

To  Sundry  Creditors'  Controlling  Account  $24,7 14.0a 

Stationery  and  Printing $300.00 

Office  Furniture  and  Fixtures 1,000.00 

Horses,  Wagons  and  Harness 1,400.00 

Repairs  to  Machinery 74.00 

Advertising 1,614.00 

Raw  Materials 11,530.00 

Machinery  and  Tools '.  .  6,162.00 

Stable  Expense 64.00 

Coal 990.00 

Engine  Supplies. '. 10.00 

Packing  Materials 1,570.00 

Sales  Book. 

Sundry  Customers'  Controlling  Account $26,875.00 

To  Finished  Goods  Sales $26,875.00 

Cash  Book. 
Page  3. 

Cash $557,865.42 

Discounts  Lost i59-58 

Sundry    Customers'    ControlHng    Ac- 
count   $2,500.00 

General  Ledger  (Posted) 555,525.0a 

Cash  Book. 
Page  4. 
Sundry  Creditors'  ControlHng  Account $6,890.00 

4J 


General  Ledger  (Posted) .' $456,871.00 

To  Cash $463,701.00 

Discounts  gained 60.00 

Journal. 

Bills  Receivable  (Posted) $6,250.00 

To    Sundry     Customers'     Controlling 

Account $6,250.00 

Sundry  Creditors'  Controlling  Account 9,000.00 

To  General  Ledger  (Posted) 9,000.00 

Arnold,  Burt  &  Conant,  in  Liquidation 254,114.67 

To  B.  Burt 132,336.87 

C.  Conant 15,792.92 

A.  Arnold 105,984.88 

Distribution  of  Capital  of  the  firm  of  Arnold,  Burt  &  Conant  as  shown 
by  the  books  of  A.,  B.  and  C. 


TRIAL  BALANCE. 
No.  I. 

A.  Arnold $105,984.88 

B.  Burt 156,986.87 

C.  Conant ) 65,692.92 

Real  Estate $80,000.00 

Horses,  Wagons  and  Harness 8,734.25 

Machinery  and  Tools 36,715.25 

Furniture  and  Fixtures 5,650.00 

Good  Will 50,000.00 

Notes  Receivable * 6,250.00 

Leasehold  Property 3,600.00 

Cash 94,164.42 

Petty  Cash 60.00 

Missouri  Pacific  Stock 40,800.00 

Raw  Material 46,530.00 

Coal 990.00 

Engine  Supplies 10.00 

Packing  Materials 1,570.00 

Customers'  Controlling  Account 18,125.00 

Notes  Discounted 6,250.00 

Consideration  Endorsing  Notes 900.00 

Loans 32,000.00 

Notes  Payable 61,000.00 

Rates  and  Taxes 275.00 

Discounts  Gained 60.00 

Creditors'  Controlling  Account 8,824.00 

Finished  Goods  Sales 26,875.00 

Repairs  to  Machinery 74.00 

Discounts  Lost 159-58 

Postage 14.00 

42 


Cable •> $4.00 

Stationery  and  Printing 309- 50 

Factory  Expense 16.00 

Sundry  Expense .50 

Stable  Expense i54-oo 

Office  Salaries 180.00 

Superintendent.  . 450-oo 

Labor 6,100.00 

Engineer  and  Fireman 120.00 

Advertising 62,505.67 

Insurance 1,562.50 


$464,848.67     $464,848.67 

Close  the  books,  allowing  for  depreciation  as  follows: 

Machinery  and  Tools,  ij%  on  original  cost,  monthly,  $489.54;  Horses, 
Wagons  and  Harness,  i|%  on  the  sinking  fund  plan;  Furniture  and 
Fixtures,  01.61%  monthly  on  the  declining  balance,  $90.97 ;  Leasehold 
Property  (credit  for  amortization,  $309.84);  debit  Leasehold  and 
credit  Profit  and  Loss  with  $18  interest. 

These  methods  are  explained  on  the  last  pages  of  this  book.  Reserve 
for  rates  and  taxes,  $137.50;  reserve  1%  for  discounts;  1%  for  bad 
debts.  Advertising  contracts  to  run  one  year  from  April  ist.  Raw 
material  can  be  purchased  at  10%  less  than  it  cost  the  firm.  The  real 
estate  has  increased  25%  in  value.  Accrued  interest  on  loans,  $50.33. 
A  dividend  of  2|%  has  been  declared  on  Missouri  Pacific  Stock.  In- 
surance for  the  month,  $130.20.  Charge  off  one-twelfth  of  the  value 
of  good  will  to  Profit  and  Loss. 

Voucher  No.  39. 
Depreciation.  * 

Machinery  and  Tools $489.54 

Horses,  Wagons  and  Harness 235.19 

Leasehold  Property 309.84 

11,034.57 

Enter  in  Cost  Ledger,  Operating  Account,  Total  and  Depreciation;  also 
"Items  in  Suspense,"  Total  and  Depreciation. 

Voucher  No.  40. 

Storekeepers'  Report. 

Cost  of  205,000  boxes;   805  lbs.  paper;   2,050  packing  cases         $1,448.27 

Oil  and  waste  consumed 5.00 

Cost  Ledger,  enter  in  Stores  Account,  under  Packing,  $1,448.27;  Heat 
and  Power,  $5.  Also  allocate  the  items  in  Packing  and  Heat  and 
Power  Accounts. 

Voucher  No.  41. 
Administration  Expenses. 

Postage,  $14;  Cables,  $4;  Stationery,  $309.50;  Sundry  Expense,  $.50; 
Discounts  Lost,  $84.58  (on  loans);    Depreciation  Furniture,  $90.97; 

43 


Cost  Ledger,  Operating  Account  (Total  and  Administration,  $328; 
Discounts  Lost,  $84.58;  Depreciation,  $90.97);  again  in  Adminis- 
tration Total,  Postage,  Cables,  Stationery,  Sundries,  Discount  Lost, 
Depreciation. 

Trading  Expense. 
Advertising,  $5,208.80;   Discounts  Lost  (Trade  Discounts),  $256.25. 

Items  in  Suspense. 

Insurance,  $130.20;   Rates  and  Taxes,  $137.50. 

Enter  these  items  in  Operating  Account  and  again  under  the  above 
headings. 

Raw  Material. 

Raw  Material,  converted  into  finished  goods,  $5,120.66. 
This  item  is  entered  under  the  Consumed  column  in  the  Raw  Material 
Account  and  later  carried  into  the  cost  sheet  of  finished  goods. 

Coal. 

Coal  consumed,  $690.  Enter  in  Coal  Account  under  Consumed  column 
and  again  in  Heat  and  Power  iVccount,  Total  and  Coal. 

Heat  and  Power  Distribution. 

This  account  will  be  divided  between  departments  according  to  the  horse- 
power consumed,  but  in  this  case  it  is  arbitrarily  distributed,  as  follows: 
50%  to  Grinding,  30%  to  Mixing,  15%  to  Drying,  5%  to  Packing. 
Transfer  to  Grinding,  $412.50;  Mixing,  $247.50;  Drying,  $123.75; 
Packing,  $41.25.    Total,  $825. 

Make  up  the  Cost  Summary  of  Finished  Goods,  Pages  13  and  14. 

It  will  first  be  necessary  to  balance  the  Cost  Ledger  by  ascertaining  the 
sum  of  the  total  columns  in  all  the   accounts  as  follows: 

•     Balance  of  Stores  on  Hand •.  .  .  .  $126.73 

"          "  Fuel. 300.00 

Raw  Material 11,530.00 

Items  in  Suspense 1,922.27 

Grinding 604.00 

Mixing 430.00 

Drying 301.25 

Packing 7,102.02 

Trading 5^465.05 

Administration 683.55 

Total  Column  of  Operating  Account. .  $28,464.87 

In  the  first  column  to  the  left,  on  folios  13  and  14  of  the  Cost  Ledger,  write 
the  captions  of  the  departments,  using  the  first  six  lines  as  follows: 
Raw  Materials,  Establishment  Charges,  Grinding,  Mixing,  Drying, 
Packing.  In  the  Total  column  opposite  Raw  Materials,  post  the  raw 
material  consumed,  $5,120.66,  and  again  in  the  Raw  Material  column. 

Transfer  the  totals  of  Grinding  Account  to  the  Summary  Sheet,  under 
appropriate  columnar  headings,  viz:  Total,  $604 — Productive  Labor, 
$162.50;    Repairs,  $29;    Heat  and  Power,  $412.50;    and  transfer  the 

44 


totals  of  the  following  accounts  in  the  same  manner:  Mixing,  Drying, 
Packing,  Establishment  Charges  (Items  in  Suspense).  Foot  these 
totals  and  skipping  three  or  four  lines  enter  Trading,  Administration 
and  Inventory.  The  Inventory  is  made  up  of  Stores,  Fuel  and  Raw 
Material,  $6,836.07.  The  total  footings  should  correspond  with  the 
Operating  Account,  $28,464.87. 
By  using  the  2,500  cases  of  goods  manufactured  as  a  divisor  for  each 
item  entered  on  the  sheet  it  will  give  the  proportion  of  cost  per  item 
in  each  department,  and  the  cost  per  case  will  be  shown  in  the  sum  of 
the  percentages  in  the  Total  column. 

From  the  Cost  Ledger  make  the  following  Journal  entry: 

Finished  Goods $15,480.20 

To  Leasehold  Property *  $309.84 

Depreciation  Machinery  and  Tools 489.54 

Depreciation  Horses,  Wagons  and  Har- 
ness   235.19 

Coal 690.00 

Packing  Material 1,448.27 

Engine  Supplies 5.00 

Insurance ■  130.20 

Superintendence 450.00 

Labor 6,100.00 

Engineer  and  Fireman 120.00 

Rates  and  Taxes -  i37-5o 

Stable  Expense 154.00 

Raw  ysLter'ml 5,120.66 

Factory  Expense 16.00 

Repairs  to  Machinery 74.00 

Cost  of  2,500  cases  of  goods. 

Discounts  Lost  (Old  Account) 181.25 

To  Discounts  (New  Account) 181.25 

1%  on  outstanding  accounts. 

Trading  Account 12,950.01 

To  Finished  Goods 12,693.76 

2,050  cases  at  cost,  $6.19208  per  case. 

Trade  Discounts  Lost 256.25 

Finished  Goods  Sales 26,875.00 

Discounts  Gained 60.00 

To  Trading  Account 26,935.00 

Leasehold  Property 18.00 

Missouri  Pacific  Dividend 1,000.00 

Consideration  Endorsing  Notes 900.00 

To  Profit  and  Loss 1,918.00 

Profit  and  Loss 10,931.52 

To  Discounts  Lost 84.58 

Bad  Debts  Reserve 181.25 

Reserves  Raw  Materials 640.93 

•    Accrued  Interest 50.33 

45 


Goodwill 

Sundry  Expense 

Postage 

Cable 

Stationery  and  Printing 

Office  Salaries 

Advertising 

Depreciation  Furniture  and  Fixtures 

Profit  and  Loss 

To  B.  Burt 

Interest    on     Capital     $157,336 

at  6% 

Interest  on  Drawings :  .  .  .  . 


$4 


$786.68 
1. 00 


$785.68 

Deduct  interest  on  $100,000  as 

per  agreement 

500.00 

500.00 

328.96 


$285.68 

C.  Conant 

To  Profit  and  Loss. 

Interest  on  $100,000  as  per  co- 
partnership agreement 

Deduct  interest  on  Capital 

Profit  and  Loss 

To  B.  Burt 

5-9  of  net  profit $4,856.83 

C.  Conant 

4-9  of  net  profit $4,856.83 

TRIAL  BALANCE  No. 

Arnold,  Burt  &  Conant  in  Liquidation 

B.  Burt " 

C.  Conant. 

Real  Estate 

Machinery  and  Tools 

Horses,  Wagons  and  Harness 

Furniture  and  Fixtures 

Goodwill 

Notes  Receivable 

Leasehold 

Cash 

Petty  Cash 

Missouri  Pacific  Stock 

Raw  Materials 

Coal 

Packing  Material 

Engine  Supplies 

Sundry  Customers 

Finished  Goods 

Advertising. 


$285.68 


166.66 

•50 

14.00 

4.00 

309-50 

180.00 

,208.80 

90.97 

285.68 


171.04 


4,856.83 


171.04 


2,698.24 

2,158.59 

I  ^ 

$105,984.88 

159,970.79 

.   67,680.47 

^80,000.00 

36,715.25 

8,734.25 

5,650.00 

45,833.34 

6,250.00 

3,308.16 

94,164.42 

60.00 

40,800.00 

41,409.34 

300.00 

121.73 

5.00 

18,125.00 

2,786.44 

57,296.87 

* 

46 


Insurance $1,432.30 

Dividend 1,000.00 

Notes  Discounted $6,250.00 

Loans 32,000.00 

Notes  Payable 61,000.00 

Rates  and  Taxes 412.50 

Sundry  Creditors 8,824.00 

Depreciation  Machinery  and  Tools 489.54 

Depreciation  Horses,  Wagons  and  Harness.  .  235.19 

Reserve  for  Bad  Debts 181.25 

Depreciation  Furniture  and  Fixtures 90- 9 7 

Reserve  for  Raw   Material. 640.93 

Accrued  Interest 50-33 

Discount  Lost  Reserve 181.25 

$443,992.10     $443,992.10 

Silas  Wilcox  fails  to  meet  his  notes  and  Burt  &  Conant  call  a  meeting 
of  their  creditors.  Prepare  a  statement  of  affairs  on  the  following 
basis:  Customers'  accounts,  $5,500,  is  uncollectable ;  $7,300  doubtful, 
but  expected  to  realize  $3,300;  the  balance  is  good;  Missouri  Pacific 
stock  is  quoted  at  96;  Leasehold  interest  can  be  sold  for  $1,200; 
Horses,  Wagons  and  Harness,  $1,200;  Real  Estate,  $100,000;  Inven- 
tory, $20,000;  Machinery  and  Tools,  $5,000;  Furniture  and  Fixtures, 
$200;  Wages  accrued,  $500;  Taxes,  $412.50;  Discounted  note  of  Mark 

'  Lane  not  expected  to  be  paid,  $2,500.  With  this  statement  and 
your  knowledge  of  the  affairs  of  the  firm,  make  up  the  statement.  The 
insurance  premium  rebate  and  the  advertising  contracts  would  be  an 
asset  to  the  extent  of  the  amount  refunded,  which  the  student  may 
treat  as  he  feels  disposed. 


47 


STATEMENT  OF  THE  AF: 
April 


LIABILITIES. 

Creditors  fully  secured: 

Mercantile  Trust  Co.  loan $20,000.00 

Accrued  interest 34-33 

20,034.33 

Value  of  securities  held  as  collateral,  300 

shares  Mo.  Pac.  stock  at  96 28,800.00 

Per  contra 8,765.67 

Creditors  partly  secured: 

Western  National  Bank  loan 12,000.00 

Accrued  interest 16.00 

12,016.00 

Deduct  value  of  securities  held  as  security, 

100  shares  Mo.  Pac.  stock  at  96 9,600.00 

$2, 416. CO 

Creditors  unsecured: 

Notes  payable 61,000.00 

Sundry  Trade  creditors 8,824.00 

A.  Arnold 105,984.88 

175,808.88 

Sundry  Preferred  Claims: 

Rates  and  Taxes 412.50 

Wages ' 500.00 

Deducted  per  contra 912.50 

178,224.88 

Contingent  Liabilities: 

Liability  on  endorsement  of  Mark  Lane. . .  2,500.00 

Silas  Wilcox 90,450.00         92,950.00 

271,174.88 

48 


[RS  OF  BURT  &  CONANT. 

H,   1902. 


ASSETS. 


NOMINAL 

EXPECTED 

VALUE. 

TO  REALIZE. 

$60.00 

94,164.42 

$94,224.42 

80,000.00 

100,000.00 

Cash: 

In  hand. . 
In  bank. . 

Real  Estate. 


Customers'  Accounts: 

Bad $5,500.00 

Doubtful 7,300.00 

Good 5,325.00         18,125.00  8,625.00 

Dividend  Mo.  Pac.  Stock 1,000.00  1,000.00 

Leasehold 3,308.16  1,200.00 

Machinery  and  Tools 36,715.25  5,000.00 

Furniture  and  Fixtures 5,650.00  200.00 

Horses,  Wagons  and  Harness.  .  .  8,734.25  1,200.00 

Inventory 44,622.51  20,000.00 

Eqtiity    in     Securities    pledged 

per  contra 38,400.00  8,765.67 


Deduct  Preferred  Claims: 

Taxes 

Labor 


240,215.09 

412.50 

500.00 

912.50 

239^302.59 


Deficit 31,872.29 


271,174.88 


40 


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Silas  Wilcox  deeds  Factory  Real  Estate  to  the  firm  in  consideration  of 
Burt  &  Conant's  agreement  to  deliver  to  him  the  two  outstanding 
notes.  Sam  Lewis,  the  holder  of  the  notes,  agrees  to  surrender  the 
notes  for  their  face  value  and  interest  ($90,450)  in  bonds  of  the  cor- 
poration about  to  be  formed. 

Burt  &  Conant  sell  to  the  Specialty  Manufacturing  Company  all  their 
assets  consisting  of  customers'  and  corporation  book  accounts,  adver- 
tising contracts,  cash,  Missouri  Pacific  stock,  leasehold  interest  (at  its 
book  value),  horses,  wagons  and  harness,  real  estate,  inventory, 
machinery  and  tools,  furniture  and  fixtures,  and  insurance  policies, 
in  consideration  of  $300,000  of  capital  stock  and  $100,000  of  the  De- 
benture Bonds  of  the  Specialty  Manufacturing  Company. 

The  Company  assumes,  in  addition,  all  the  HabiHties  of  Burt  &  Conant, 
with  the  exception  of  the  account  of  S.  Lewis,  who  is  to  receive  Deben- 
ture Bonds  in  payment  of  his  claim. 

Make  the  necessary  entries  to  close  the  books  and  wind  up  the  business. 

Real  Estate $90,450.00 

To  Silas  Wilcox $90,450.00 

Pursuant  to  an  agreement,  etc.,  etc. 

Silas  Wilcox 90,450.00 

To  Sam  Lewis 90,450.00 

Notes  received  from  Lewis  and  delivered  to  Wilcox. 

Sundries: 

To  Specialty  Manufacturing  Co.- $208,271.71 

Arnold,  Burt  &  Conant,  iti  Liquidation $105,984.88 

Loans 32 ,000.00 

Notes  Payable 6i,*ooo.oo 

Rates  and  Taxes 412.50 

Creditors'  Book  Accounts 8,824.00 

Accrued  Interest 50-33 

Liabilities  assumed  by  the  Specialty  Manu- 
facturing Co.,  according  to  the  agreement, 
•  etc.,  etc. 

Specialty  Manufacturing  Co $514,047.29 

To  Real  Estate $170,450.00 

Horses,  Wagons  and  Harness 8,734.25 

Machinery  and  Tools 36,715.25 

Furniture  and  Fixtures •  5,650.00 

Lease 3,308.16 

Missouri  Pacific  Stock 40,800.00 

Raw  Materials. .' .  .  .  41,409.34 

Finished  Goods 2,786.44 

Coal 300.00 

Packing  Material 121.73 

Engine  Supplies 5.00 

Customers'  Accounts 18,125.00 

Advertising • 57,296.87 

ST 


Insurance $1,432.30 

Missouri  Pacific  Dividend .  1,000.00 

Good  Will 125^912.95 

Assets  taken  over  by  the  Specialty  Co. 

C,  N.  C,  G.  L.  Paid  to  Specialty  Manufacturing  Co. 

balance  of  cash  on  hand,  amounting  to.  .  .  $94,224.42 

Sundries : 

To  Profit  and  Loss $81,898.74 

Depreciation  Machinery  and  Tools $489.54 

Horses,  Wagons  and  Harness. .  235.19 

Bad  Debts 181.25 

Furniture  and  Fixtures 90-97 

Reserve  for  Raw  Materials.  .  .  640.93 

Discounts  Lost 181.25 

Good  Will 80,079.61 

Specialty  Manufacturing  Co.  stock 300,000.00 

Specialty  Manufacturing  Co.  bonds 100,000.00 

To  Specialty  Manufacturing  Co $400,000.00 

Stocks  and  bonds  received  in  payment  of  assets. 

Sam  Lewis $90,450.00 

To  Debenture  Bond  Account $90,450.00 

Bonds  turned  over  to  close  his  account. 

Profit  and  Loss  Account $81,898.74 

To  B.  Burt • $45,499.30 

C.  Conant 36,399.44 

B.  Burt $205,470.09 

To  Specialty  Manufacturing  Co.  stock.  .  .  .  $195,920.09 

Specialty  Manufacturing  Co.  bonds. . .  .  9,550.00 

Stocks  and  bonds  turned  over  to  Burt  as  his  interest  in  capital. 

C.  Conant $104,079.91 

To  Specialty  Manufacturing  Co.  stock.  ...  $104,079.91 

Stock  turned  over  to  Conant  in  payment  of  his  capital  interest. 

Depreciation. 

Written  off  at  a  fixed  rate  per  cent,  on  a  declining  balance. 
The  formula  for  determining  the  rate  per  cent,  to  be  written  off  on  a 
declining  balance  is  given  by  Mr.  George  Lisle  as  follows: 

Depreciation  of  Furniture  and  Fixtures. 

Let  V  represent  value  of  investments $5,650.00 

R  Residual  value 4,650.00 

N  Number  of  terms 12 

52 


(V)- 


Log. 


or 


I  — 

(4650)      I 

(565°)         12 

I 
12    (3,667,453 

(R),^ 

(V)" 

=        9839 

(V)" 

=     d      =      .( 

01.61%  nearly. 

3,753,048) 


1.992950 


OI6I 


LEASEHOLD  PROPERTY  DEPRECIATION. 

The  principal,  $3,600,  at  compound  interest  for  twelve  periods  (at  1.005 
per  month)  at  6%  per  annum  will  amount  to  $3,822.04.  The  annuity 
of  $1  for  twelve  periods  at  the  same  rate  and  time  equals  $12.3356. 

Dividing  the  principal,  $3,822.04  by  the  annuity  of  one  dollar  $12.3356 
equals  $309.84,  to  be  written  off  monthly  and  charged  to  Profit  and 
Loss ;  and  six  per  cent,  on  the  principal  is  charged  to  the  lease  account 
and  credited  to  Profit  and  Loss. 


LEASE. 

Principal $3,600.00  |  First      |  By  Profit  and  Loss 

Interest  6% 

(Profit  and  Loss) 

$3,618.00 


(  By  Profit  and  Loss..        $309.84 
Interest  6% 18.00  f  Month  |  Balance  down 3,308.16 


$3,618.00 

Balance $3,308.16  )  Second  j  Profit  and  Loss $309.84 

Interest  6% 16.54  f  Month  1  Balance  down 3,014.86 

(Profit  and  Loss)  

$3,324-70 


Balance, 

Interest. 


$3,324.70 

$308.30  I  Twelfth  f  -n    ^ ,        -,  T 

1.54  I  Month    I  Profit  and  Loss. 


$309.84 


$309.84 
$309.84 


SINKING  FUND  METHOD  OF  DEPRECIATION. 

On  theory  to  set  aside  each  year  such  a  sum  as  to  accumulate  at  com- 
pound interest  at  a  given  rate,  will  amount  to  the  original  investment. 
The  amount  of  one  dollar  per  month  or  an  annuity  of  one  dollar  per 


S3 


month,  invested  at  the  end  of  the  first  month,  at  compound  interest 
at  the  rate  of  ii%  per  month,  in  twenty-four  months  will  amount  to 

$28.633445-. 
Dividing  the  investment,  $6,734.25,  by  the  annuity,  $28.633445  gives 
the  amount  to  be  invested,  i.  e.,  $235.19.  To  this  must  be  added  the 
interest  on  the  principal  at  i>^%  per  month,  that  is  to  say,  $235.19  + 
i^%  =  $238.72  for  the  second  month;  $242.30  for  the  third  month, 
and  so  on  until  the  annuity  and  accumulations  amount  to  $6,734.25, 
which  they  will  do  in  two  years. 

Horses,  Wagons  and  Harness. 

^""'^'P"^ ^'•^''■''  Sh  }        By  Profit  and  Loss..        $.^5.^9 

Second  )  ,,         ,,       <<         <<  o  ^ 

Month  f  '^^-7' 

Third     )  ..         ..       .< 
Month   I  ^42.30 

Twenty- ) 

fourth      [  "         "       "         "              331.19 

Balance  of  Ac-  Month     )  

count..:,...     $2,331.19  Residual  balance. .. .     $2,000.00 

Balance $2,000.00 

The  method  frequently  adopted  for  depreciating  the  value  of  an  account 
is  to  write  off  a  fixed  rate  per  cent,  on  the  original  investment,  as 
for  instance: 

Value  of  Machinery  and  Tools $36,715.25 

Residual  value  20% 7)343-05 

Depreciation  to  be  written  off  being  80%  in  60  terms $29,372.20 

80 


60 


=      ^-333333% 


iK%  of  $36,7 15.25  =$489.54  to  be  written  off  monthly. 

This  method  required  a  much  smaller  amount  to  be  charged  off  in  the 
beginning  than  by  the  percentage  on  a  declining  balance  method. 


54 


PART  III 


Part  3. 

Specialty  Manufacturing  Co. 

Books  to  be  Opened. 
Ledger,  Audited  Voucher  Record,  Cash  Book,  Journal,  Cost  Ledger 

Accounts  to  be  Opened. 

General  Ledger. 

Plant  and  Sundry  Assets,  Burt  &  Conant,  A.  Arnold,  Loans,  Notes 
Payable,  Rates  and  Taxes,  Sundry  Creditors,  Capital  Stock,  DelDenture 
Bonds,  Charles  Adams,  George  Wallace,  Thomas  Hunt,  Real  Estate, 
Horses,  Wagons  and  Harness,  Machinery  and  Tools,  Furniture  and 
Fixtures,  Leasehold  Property,  Missouri  Pacific  Stock,  Customers' 
Book  Accounts,  Advertising,  Insurance,  Missouri  Pacific  Dividend, 
Good  Will,  Office  Pay  Roll,  Officers'  Salaries,  Cost  Account,  Cash, 
Audited  Vouchers,  Stationery  and  Printing,  Reserve  for  Taxes,  Re- 
serve for  Depreciation  Machinery  and  Tools,  Reserve  for  Depreciation 
Horse,  Wagon  and  Harness,  Contract  Account,  Joe  Sam  Brown, 
Pine,  Twig  &  Co.,  Hardwood  &  Company,  Smith,  Curtis  &  Co.,  White- 
house  &  Company. 

Cost  Ledger. 

Folios  I  and  2. 

Operating  Account. 

Columnar  Headings. 

Vouchers,  Total,  Labor,  Superintendent,  Stable  Expense,  Raw  Mate- 
rials, Maintenance  and  Repair,  Stores,  Fuel,  Factory  Expense,  Rates 
and  Taxes,  Depreciation,  Insurance,  Advertising,  Sundries. 

Folio  3. 
Raw  Materials. 
Vouchers,  Total,  Consumed. 

Stores. 
Vouchers,  Total,  Consumed. 

FoHo  4. 
Fuel. 
Vouchers,  Total,  Consumed. 

Folio  5. 
Heat  and  Power. 
Vouchers,  Total,  Fuel,  Labor,  Repairs. 

57 


Folio  6. 

Establishment  Charges. 

Vouchers,  Total,  Superintendent,  Stable  Expense,  Factory  Expense, 
Insurance,  Advertising,  Depreciation,  Rates  and  Taxes,  Heat  and 
Power. 

Folio  7.  , 

Contract  No.  i. 
Vouchers,  Total,  Labor,  Material,  Establishment  Charges. 

Contract  No.  2. 
Contract  No.  3. 
Contract  No.  4. 
Contract  No.  5. 
Same  as  above. 

The  company  is  incorporated  under  the  laws  of  the  State  of  New  Jersey 
with  an  authorized  capital  of  $350,000  and  executes  a  Debenture 
Mortgage  for  $100,000. 

5th. 

The  company  purchase  of  Burt  &  Conant,  Real  Estate,  Leasehold 
Property,  Raw  Materials,  Stores,  Horses,  Wagons  and  Harness, 
Machinery  and  Tools,  Finished  Goods,  Book  Accounts,  Furniture 
and  Fixtures,  Missouri  Pacific  Stock,  Coal,  Contracts,  &c.,  &c.,  valued 
at  $514,047.29  in  consideration  of  $300,000  of  the  Capital  Stock 
and  $100,000  of  the  Debenture  Bonds  in  addition  to  assuming  the 
following  liabiUties:  A.  Arnold,  $105,984.88;  Loans  and  Interest, 
$32,050.33;  Notes  Payable,  $61,000;  Rates  and  Taxes,  $412.50; 
Creditors'  Accounts,  $8,824. 

C,  N.  C,  G.  L.  Charles  Adams,  George  Wallace  and  Thomas  Hunt, 

each  pay   $100,   their  stock  subscription,  into 
the  treasury  of  the  company. 

See  Journal  entry.  Burt  &  Conant  pay  into  the  treasury  of  the  com- 
pany cash  amounting  to  $94,224.42. 
The  assets  of  the  company  have  been  revalued  for 
the  purpose  of  placing  them  upon  the  books 
as  follows: 
Real  Estate,  $240,450;  Horses,  Wagons  and  Har- 
ness, $8,740;  Machinery  and  Tools,  $45,002; 
Furniture  and  Fixtures,  $5,650;  Leasehold 
Property,  $3,508;  Missouri  Pacific  Stock,  $40,800; 
Raw  Materials,  $39,016.29;  Stores,  $126;  Coal, 
$300;  Customers'  Book  Accounts,  $18,125; 
Finished  Goods,  $2,802;  Advertising  Contracts, 
$57,296;  Insurance,  $1,432;  Missouri  Pacific 
Dividend,  $1,000. 

58 


Journal  Entries. 

5th. 

The  Specialty  Manufacturing  Company. 

Incorporated  under  the  Laws  of  the 

State  of  New  Jersey  with  an 

Authorized  Capital 

of 

$350,000, 

Divided  into  3,500  shares  of  $100  each. 

Plant  and  Sundry  Assets $514,047.29 

Cash 94,224.42 

$608,271.71 

To  Burt  and  Conant,  Vendors,  for  transfer  to  this  company  by  Burt 
and  Conant,  the  Vendors,  their  right,  title  and  interest  in  the  following 

Assets: 

Real  Estate,  Horses,  Wagons  and  Harness,  Furniture  and  Fixtures, 
Leasehold  Property,  Missouri  Pacific  Stock,  Raw  Materials,  Finished 
Goods,  Good  Will  and  Sundry  other  Assets  fully  set  forth  in  the  deed 
of  conveyance  dated  May  ist  and  pursuant  to  a  resolution  of  the 
Board  of  Directors,  recorded  in  minute  book,  page  i,  for  and  in  con- 
sideration of  3,000  shares  of  the  Capital  Stock  of  this  company  and 
$100,000  in  Debenture  Bonds  and  the  assumption  of  the  following 

Liabilities: 

Burt  and  Conant $208,271.71 

To  A.  Arnold. . , $105,984.88 

Loans  Payable '  32,050.33 

Notes  Payable 61,000.00 

Rates  and  Taxes 412.50 

Creditors'  Accounts 8,824.00 

Burt  and  Conant 400,000.00 

For  three  thousand  shares  of  the  Capital 
Stock  and  one  hundred  Debenture  Bonds, 
par  value  $400,000,  issued  to  the  vendors  . 

in  part  payment  of  the  assets  sold  by  them 
to  the  Specialty  Manufacturing  Co. 

To  Capital    Stock $300,000.00 

Three  thousand  shares  of  stock  issued  by  this 
company  as  part  payment  of  the  amount 
due  Burt  and  Conant  under  the  terms  of  a 
contract  dated  May  ist. 
Debenture  Bonds $100,000.00 

59 


One  hundred  bonds,  par  value  $i,ooo  each, 
issued  in  addition  to  the  above  mentioned 
stock  in  accordance  with  the  terms  of  the 
Bill  of  Sale  alluded  to. 

Chas.  Adams $100.00 

Geo.  Wallace 100.00 

Thos.  Hunt 100.00 

To  Capital  Stock $300.00 

Subscription  to  Capital  Stock  issued  for  cash. 

Sundries. 

To  Plant  and  Sundry  Assets $514,047.29 

In  accordance  with  the  resolution  of  the  Board  of  Direc- 
tors, the  assets  of  the  company  have  been  revalued  for  the 
purpose  of  placing  them  upon  the  books  of  the  company 
under  appropriate  headings. 

Real  Estate $240,450.00 

Horses,  Wagons  and  Harness 8,740.00 

Machinery  and  Tools 45,002.00 

Furniture  and  Fixtures 5,650.00 

Leasehold  Property 3,308.00 

Missouri  Pacific  Stock 40,800.00 

Cost  Account. 

(Raw  Material) $39,016.29 

(Stores) .  126.00 

(Coal) 300.00  39,442.29 

Customiers'  Book  Accounts 18,125.00 

Finished  Goods 2,802.00 

Advertising  Contracts 57,296.00 

Insurance 1,432.00 

Missouri  Pacific  Dividend 1,000.00 

Good  Will 50,000.00 

Cost  Ledger.  Charge  the  Operating  Account  with  the  Inventory 

of  Raw  Materials,  $39,016.29,  in  Total  and  Raw 
Material  column,  also  in  Raw  Material  Account; 
Stores,  $126,  and  Coal,  $300;  the  last  two  items 
to  be  entered  in  Operating  Account  and  allo- 
cated in  stores  and  Fuel  Accounts. 

C,  NC,  GL.  The  customers  pay  into  the  treasury  their  various 

accounts,  $18,125. 

C,  NC,  GL.  .  Paid  A.  Arnold  $105,984.88;    Loans,  $32,050.33; 

Creditors,  $8,824;  Sold  Missouri  Pacific  Stock 
at  125  net,  $50,000;  Collected  Missouri  Pacific 
Dividend,  $1,000. 

6th. 

A.  V.  R.,  A.  v.,  Purchased  of  L.  Williams  raw  material,  $10,000, 

Cost.  Cost  Ledger,  Operating  Account,  Raw  Material 

Account,  Voucher  No.  i. 

60 


A.  V.  R.,  A.  v.,  S.       Purchased  of  Nesbitt  &  Gompany  books  and  sta- 

&  P.  tionery,  $500. 

A.  V.  R.,  A.  V.  Purchased     of    Lawrence     Bush     raw     material, 

Cost.  $6,000,  Voucher  No.  2.    (Cost  Ledger,  Operating 

Account,  Raw  Material;  Raw  Material  Account, 

Total  and  Stock.) 

C,  NC,  CA.  Paid  Labor,  $4,000;   Voucher  No.  3;   Charge  Cost 

Account  in  General  Ledger.  (Cost  Ledger, 
Operating  Account,  Labor;  Contract  No.  i, 
$2,500;  Contract  No.  2,  $500;  Contract  No.  3, 
$500;  Contract  No.  4,  $200;  Contract  No.  5, 
$200.  Heat  and  Power,  $100.) 
C,  NC,  GL.  Office  Salaries,  $400;   Officers'  Salaries,  $1,000. 

C,  NC,  CA.  Stable  Expense,  $50;  Superintendent,  $500.    (Cost 

Ledger;    Operating  and  Establishment  Charges, 
Voucher  No.  4.) 
A.  V.  R.,  A.  v.,  M.      Purchased    of    Bogota    Machine    Company,    new 

&  T.  machinery,  $3,000. 

A.  V.  R.,  A.  v.,  C       Purchased  of  Bogota  Machine  Company,  machin- 
A.  •         ery  to  replace  worn-out  machines,  $600.    Vouch- 

er No.  5.      (Cost    Ledger,    Operating   Account; 
Heat  and  Power.) 
A.  V.  R.,  A.  v.,  Purchased  of  Sommerville  Paper  Box  Company 

CA.  boxes  for  special  orders,  $1,000,  Voucher  No.  6. 

(Cost  Ledger,  Operating  Account,  Total,  Stores; 
Total.) 
Stores. 

8th. 

A.  V.  R.,  A.  v.,  C       Purchased  of  Soot  &  Company  coal,  $950;   wood, 
A.  $100.     Total,  $1,050.     Voucher  No.   7.     (Cost 

Ledger,     Operating    Account,     Fuel    Account, 
Total.) 
A.  V.  R.,  A.  v.,  Purchased  of  C  Bogart  &  Company,  raw  mate- 

CA.  rials,  $19,000;   Voucher  No.  8.    -(Operating  Ac- 

count;  Raw  Materials.) 
C,  NC,  AV.  Paid  Geo.  F.  Nesbitt  &  Co.  bill  of  6th  inst.,  $500. 

A.  V.  R.,  A.  v.,  Received  bill  of  New  York  Window  Cleaning  Co. 

CA.  for  work  in  factory,  $40.     (Cost  Ledger,  Oper- 

ating Account,   Total,   Factory   Expense;     Es- 
tablishment Charges;    Total,  Factory  Expense, 
Voucher  No.  9.) 
A.  V.  R.,  A.  v.,  Received  bill  of  Jansen  &  Co.  for  care  of  horses, 

CA.  $50.     (Cost  Ledger,  Operating  Account;   Estab- 

lishment Charges;   Voucher  No.  10.) 

loth. 

C,  NC,  CA.  Paid  Labor,  $6,000;    Voucher  11.     (Cost  Ledger, 

Operating  Account,  Contract  No.  i,$5oo;  Con- 
tract No.    2,   $1,500;    Contract  No.   3,   $1,100; 

61 


Contract  No.  4,  $2,000;  Contract  No.  5,  $800; 
Heat  and  Power,  $100.) 

C,  N.  C,  C.  A.  Paid  Superintendent,  $500;    Stable  Expense,  $50. 

Voucher  No.  12.  (Cost  Ledger  as  per  former 
similar  entry.) 

C,  N.  C,  G.  L.  Office  Salaries,  $400;   Officers'  Salaries,  $1,000. 

C,  N.  C,  V.  R.  Paid  Window  Cleaning  Company,  $40. 

C,  N.  C,  V.  R.  Paid  Jansen  &  Co.,  $50. 

As  the  month's  record  is  incomplete  the  depre- 
ciation is  arbitrarily  made  and  has  no  connection 
with  the  former  accounts. 
The  following  overhead  charges  are  to  be  charged 
to  Cost  Account  in  the  General  Ledger  and  to 
Operating  Account  in  the  Cost  Ledger. 

Journal.  Cost  Account $5,802.93 

To  Insurance $119.33 

Advertising 4,775.50 

Depreciation      Ma- 
chinery and  Tools.  300.00 

Depreciation 
Horses,      Wagons 
and  Harness 100.00 

Lease 275.60 

Rates  and  Taxes. . .  232.50 

Cost  Ledger.  Enter  the  following  items  in  Operating  Account 

under  appropriate  headings,  also  in  Establish- 
ment Charges  as  overhead  charges  for  the 
period:  Insurance,  $119.33  i  Advertising,  $4,775.- 
50;  Depreciation,  $675.60;  Rates  and  Taxes, 
$232.50;   Voucher  No.  13.    Total,  $5,802.93. 

The  corporation  has  taken  five  contracts  and  from 
the  time  cards  of  the  laborers.  Contract  No.  i 
is  charged  with  15,000  hours'  labor;  Contract 
No.  2  with  10,000  hours'  labor;  Contract  No.  3 
with  8,000  hours;  Contract  No.  4,  11,000  hours; 
Contract  No.  5  with  5,000  hours,  at  20  cents 
per  hour. 

The  storekeeper's  books  show  Contract  No.  i  is 
charged  with  raw  material,  $15,000;  Contract 
No.  2,  $5,000;  No.  3,  $10,000;  Contract  No.  4, 
$5,000;  Contract  No.  5,  $5,000.  The  Estab- 
lishment Charges  are  to  be  apportioned  ac- 
cording to  the  time  spent  on  each  contract. 
J.  Contract  No.  i  is  chargeable  to  Joe  Sam  Brown 

for  $25,000;  No.  2  to  Pine,  Twig  &  Co.  for 
$11,000. 

No.  3,  Hardwood  &  Company,  $16,000;  No.  4, 
Smith,  Curtis  &  Company,  $12,000;  No.  5, 
Whitehouse  &  Company,  $8,000. 

62 


Charge  these  amounts  to  the  above  named  parties 

and   credit   Contract    Account   with   the   total 

amount  or  open  an  account  with  each  contract 

if  desirable. 

Cost  Ledger.  Charge   each   contract   with   the   amount   of  raw 

material  chargeable  to  each,  and  enter  the 
amount  in  Raw  Material  Account  under  a  col- 
umn headed  Consumed,  as  Voucher  No.  14. 

Charge  Heat  and  Power  with  fuel,  $1,250,  and 
enter  the  same  amount  in  a  column  headed 
Consumed  in  the  Fuel  Account.    Voucher  No.  15. 

Transfer  the  total  of  Heat  and  Power  to  Estab- 
lishment Charges  amounting  to  $2,050,  as  this 
is  a  general  factory  charge  that  affects  all  con- 
tracts and  cannot  be  charged  to  a  specific  piece 
of  work. 

On  the  lower  half  of  folio  6,  write  Distribution  of 
Establishment  Charges  and  head  the  columns 
to  correspond  with  those  of  Establishment 
Charges;  in  the  Voucher  column  write 
Contract  i 
2 

3 
4 

5 
The  total  Establishment  Charges  amount  to  $9,042.93-^49,000  hours  = 

.1845499  = 

Contract  No.  i,  15,000  hours  x  .1845499   .  .  .         $2,768.25 

2,  10,000      "       "         "  ...  1,845.50 

3,  8,000      "       "         "  ...  1,476.40 

4,  iT,ooo      "       "         "  ...  2,030.03 

5,  5,000      "       "         "  ...  922.75 

Total   Establishment  Charges  to  be  allo- 
cated          $9,042.93 


^3 


1^ 

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64 


Cost  Ledger.  Charge  each  contract  with  its  pro  rata  share  of 

EstabUshment  Charges,  viz:  No.  i,  $2,768.25; 
No.  2,  $1,845.50;  No.  3,  $1,476.40;  No.  4, 
$2,030.03;   No.  5,  $922.75. 

This  entry  is  merely  a  transfer  of  the  amount  of 
overhead  charges  from  the  temporary  account 
(EstabHshment  Charges)  to  the  Contract  Ac- 
counts. 

The  contracts  being  finished,  charge  the  cost 
thereof  to  Contract  Account,  and  credit  Cost 
Account  as  follows: 

J.  Contract  Account $58,842.93 

To  Cost  Account.. .  .  $58,842.93 

Transfer  from  the  Cost 
Ledger,  to  the  Gen- 
eral Ledger,  the  cost 
of  the  contracts 
specified  below: 

Contract  No.  i 20,768.25 

2 8,845.50 

3 ••  13,076.40                         ■ 

4 9.230.03 

5 6,922.75 

Foot  and  post  the  books  of  original  entry  and  take 
off  a  trial  balance. 

TRL\L  BALANCE. 

Cash $2,300.21 

Real  Estate 240,450.00 

Horses,  Wagons  and  Harness 8,740.00 

Machinery  and  Tools 48,002.00 

Furniture  and  Fixtures 5,650.00 

Leasehold 3,032.40 

Finished  Goods 2,802.00 

Advertising 52,520.50 

J.  S.  Brown 25,000.00 

Pine,  Twig  &  Co ?  11,000.00 

Hardwood  &  Co 16,000.00 

Smith,  Curtis  &  Co 12,000.00 

Whitehouse  &  Co 8,000.00 

Cost  Account ,  35,242.29 

Good  Will 50,000.00 

Office  Salaries 800.00 

Officers'  Salaries 2,000.00 

Stationery  and  Printing 500.00 

Insurance 1,312.67 

Notes  Payable $61,000.00 

Taxes. 645.00 

Capital  Stock 300,300.00 

6s 


Debenture  Bonds 

Missouri  Pacific  Stock 

Reserve  Machinery  and  Tools. 
Horses,  Wagons  and  Harness. 

Contract  Account .  . 

Audited  Voucher 


$100,000.00 

9,200.00 

300.00 

100.00 

13,157-07 
40,650.00 

1525,352.07     $525,352.07 


Analysis  of  Cost  Account. 


Raw  Material 

Stores 

Fuel 

Totals 

Purchases 

$74,016.29 

$1,126.00 

$1,350.00 

$76,492.29 

Consumed 

40,000.00 

1,250,00 

41,250.00 

Cost  Ledger 
Balance 

34,016.29 

1,126.00 

100.00 

35,242.29 

66 


PART  IV. 


Part  4. 

G.  Fava. 

BOOKS  TO  BE  OPENED. 

Ledger,  Account  Sales  Journal  and  Cash  Book, 
General  Ledger. 

ACCOUNTS  TO  BE  OPENED. 


FOLIO. 


Brown  &  Selcomb. 

Sales. 

Freight. 

Duty. 

Custom  Brokerage. 

Cartage. 

Insurance. 

Auction  Charge. 

Interest. 

Commission. 

Cable. 

Rent. 

G.  Fava. 

Guarantee. 


FOLIO.  ' 

4  Cash. 

5  Profit  and  Loss. 

10  Sterling  Controlling  Account. 

11  Documentary  Advance. 
II  Carvalho  Brothers. 

II   Smith,  Payne  &  Smith. 

11  L.  Rizzo. 

12  G.  Aita. 

12  Tomasso  Cavallaro. 
12  Julio  Bonzano. 

12  Gaetano  Botta. 

13  Marine  Insurance. 

13   Bankers'  Commission. 
13  Pasquale  Rotino. 

The  business  of  receiving  green  fruit  from  Italy 
was  conducted  on  a  large  scale  principally  by 
Italians,  who,  for  the  most  part,  had  no  capital 
whatever.  The  firms  fortunate  enough  to  secure 
letters  of  credit  were  enabled  to  influence  large 
shipments  of  goods. 

The  shipper  in  Italy  forwards  his  bill  of  lading  to 
the  commission  merchant  in  New  York,  who 
paid  the  duty  and  freight  with  money  advanced 
to  him  by  the  auction  house.  The  fruit  was 
then  sold  on  the  dock  at  auction.  The  auc- 
tioneers collected  the  bills  when  due  and  gave 
their  check  for  net  proceeds  to  the  commis- 
sion merchant,  who,  in  turn,  rendered  his  ac- 
count sales  to  the  shipper.  Competition  made 
it  necessary  to  remit  promptly,  and  account 
.  sales  were  often  sent  off  the  day  the  goods  were 
sold  accompanied  by  a  bill  of  exchange  or  check 
on  London  or  Paris.  In  order  to  do  this,  some 
of  the  charges  were  estimated  and  they  were  not 
always  correct. 


69 


G.  Fava,  an  Italian  gentleman,  without  capital, 
decides  to  embark  in  the  commission  business, 
and  in  due  time  receives  consignments  of  fruit 
as  follows: 

From  Ex.  Steamer  Letimbro 

L.  Rizzo 50  cases  oranges 

G.  Aita 100       "         " 

Tomasso  Cavallaro 100       "         " 

Julio  Bonzano 250       "         " 

Gaetano  Botta 5,000       "         " 

Duty,  25c.  per  box.     Freight,  2  shilHngs  per  box. 

July  I  St. 

Borrowed  from  Brown  &  Selcomb  (the  auction- 
eers) $4,250  on  account  shipment  Steamer 
Letimbro. 

Paid  freight,  Phelps  Bros.  &  Company,  $2,685.00 
Steamer  Letimbro. 

Paid  duty i,375-oo 

Steamer  Letimbro. 

Paid  Custom  House  Broker 2.50 

Steamer  Letimbro. 

2nd. 

Brown  &  Selcomb  sell  the  fruit,  and  Fava  makes 
his  account  sale  as  follows: 
Account  Sales  Book.  Sold  for  the  account  and  risk  of  Sig.  L.  Rizzo,  of 

Palermo,  50  cases  of  oranges,  per  Str.  Letimbro. 

Charge  Sale.  Lot  No.  i,  50  cases  oranges,  at  .  . .  .$5.00     $250.00 


Cash. 


C.  Charge  Freight 

Account. 
C.  Charge  Duty 

Account. 
C.  Charge  C.  H.  B 

Account. 


Duty  Column. 
CHB  Column. 
Freight  Column. 
Cartage  Column. 
Insurance  Column. 
A.  C.  Column. 
Interest  Column. 
Com.  Column. 
Net.  Proc.  Column. 


Account  Sales. 


Duty $12.50 

Custom  House  Broker .25 

Freight,  ;^5,  at  $4.90 24.50 

Cartage 1.25 

Insurance 1.87 

Auction  Charges,  1%. 2.50 

Interest,  30  days "1-25 

Commission,  5% 12.50      $56.62 

Draft  on  Smith,  Payne  &  Smith 

£39  gs.  4d.,  at  $4.90 $i93-38 

New  York,  Jan.  2,  1902.    E.  &  O.  E. 
Having  entered  this  Account  in  the  Account  Sales 
Journal,  the  student  will  use  it  as  an  example 
for  the  others. 
Account  Sales,  G.  Aita,  100  cases,  Steamer  Letim- 
bro  Sales,    $400;     Duty,    $25;     Custom   House 

70 


Account  Sales. 


Cash  Charge. 
Cable  Account. 
Cash  Cr.  B.  &  S. 


Journal. 


Cash. 


Cash. 


Brokerage,  50c. ;  Freight,  $49.00;  Cartage,  $2.50; 
Insurance,  :$3. 00;  Auction  Charges,  $4.00;  In- 
terest, $^.00;  Commission,  $20.00.  Draft  on 
Smith,  Payne  &  Smith,  ;^6o,  at  $4.90,  $294.00. 

Account  Sales,  Tomasso  Cavallaro,  100  cases, 
Steamer  Letimbro  Sale,  $247.50;  Duty,  $25; 
Custom  House  Brokerage,  50c.;  Freight,  $49; 
Cartage,  $2.50;  Insurance,  $1.85;  Auction 
Charges,  $2.48;  Interest,  $1.24;  Commission, 
$12.57.  Net  Proceeds,  £^1  2s.  8>d.,  at  $4.90, 
$152.56. 

Account  Sales,  Julio  Bonzano,  250  cases.  Steamer 
Letimbro  Sale,  $1,050;  Duty,  $62.50;  Custom 
House  Brokerage,  $1.25;  Freight,  $122.50;  Cart- 
age, $6.25;  Insurance,  $7.87;  Auction  Charges, 
$10.50;  Interest,  $5.25;  Commission,  $52.50. 
Net  Proceeds,  ;^i59  9^.  4<i.,  at  $4.90,  $781.38. 

Account  Sales,  Gaetano  Botta,  5,000  boxes, 
Steamer  Letimbro  Sale,  $18,600;  Duty,  $1,250; 
Custom  Brokerage,  $1.50;  Freight,  $2,440; 
Cartage,  $7.50;  Insurance,  $5.00;  Cable,  $1.25; 
Auction  Charges,  $186;  Interest,  $93;  Com- 
mission, $465.  Net  Proceeds,  ;^2,887  i8>s.  2d., 
at  $4.90^  Si4,i50-75- 

Cable,  $1.25. 

Brown  &  Selcomb  guarantee  the  sales  made  by 
them  for  a  consideration  of  1%,  and  make  a 
further  advance  of  $15,500. 

Fava  draws  his  drafts  on  Smith,  Payne  &  Smith, 
London,  for  the  net  proceeds  of  all  the  accounts 
but  Gaetano  Botta's,  for  whom  we  purchase 
Brown  Bros.  &  Company,  a  sight  bill,  £2,SSy 
i8s.  2d.,  at  $4.90,  $14,150.75.  Make  entry  as 
follows: 

L.  Rizzo,  St.  Let- 
imbro  ;^39     95.     4d. 

G.  Aita 60     05.     od. 

Tomasso       Caval- 
laro     31     2S.     8d. 

Julio  Bonzano..  .  .  159     gs.     4d. 
To  Smith, 
Payne  & 
Smith ;^290     is.     4J. 

SterHng     Control- 
ling Account.  .  .£2,88^   18s.   2d.  $14,150.75 

Post  from  the  Cash  Book  and  charge  (from  the 
above  entry)  Gaetano  Botta's  Account  with 
;^2,887  i8s.  2d.  (sterling  only). 

Paid  Ofhce  rent,  $25. 

71 


J.  Charge  Docu- 
mentary advance 
and  credit  C.  Bros. 
Sterling  only  ;^iQo. 

Cash. 

Cash. 

Controlling  Account 
and  S.  P.  &  S. 
Cash. 

Back  part  of 
Account  Sales 
Book. 


Cash. 
Cash. 


Account  Sales. 


Account  Sales. 
Cr.  Doc.  Adv. 

Cr.  M.  Ins. 
Cr.  B.  Com. 


Cr.  Rotino. 


G.  Fava  drew  for  his  personal  account,  $50. 
Paid  Insurance  Premium,  $5.75. 
Paid  Cartage,  $7.50. 

4th. 

Received  Ex.  Steamer  Morro  Castle,  4,000  boxes 
oranges,  as  follows: 

Pasquale  Rotino,  500  boxes,  upon  which  he  had 
drawn  on  the  bankers,  Carvalho  Brothers,  Lon- 
don, ;^ioo,  which  G.  Fava  accepts. 

G.  Botta,  3,000  boxes;  L.  Rizzo,  300  boxes;  G. 
Aita,  200  boxes. 

Borrowed  from    Brown    &    Selcomb    on    account 
Morro  Castle  shipment,  $6,000. 
Purchased  of  Ladenburg,  Thalman  &  Company, 
New   York,    60   days    sight   draft,    £s^o,   at 
$4.88,  $2,440.00. 
'Remitted  to  Smith,  Payne  &  Smith,  London,  as 
a  deposit,  draft  at  ;^5oo. 

Brown  &  Selcomb  render  their  Account  Sales  for 
Letimbro  consignments;  Gross  Sale,  $20,547.50; 
Auction  Charges,  $205.48;  Guarantee,  $205.46; 
Cartage,  $12.50.  Net  Proceeds,  $20,026.21.  In- 
terest advances,  $97.85. 

Received  check  from  Brown  &  Selcomb,  balance 
due  on  Letimbro,  $276.21. 

Paid  freight  on  Morro  Castle  consignment,  $3,920. 

Paid  Custom  House  Brokerage,  $2.50. 

Paid  Duty,  $1,000.00. 

5th. 

Brown  &  Selcomb  sell  the  cargo  at  auction  and 
Fava  makes  up  his  Account  Sales  as  follows: 

Pasquale  Rotino  Sale,  $1,700.00;  Duty,  $125; 
Custom  House  Brokerage,  $1.50;  Freight,  $490; 
Cartage,  $1.25;  Insurance,  $2.50;  Cable,  $1.25; 
Auction  Charges,  $17.00;  Interest,  $8.50;  Com- 
mission, $85.  Net  Proceeds,  ;^i98  155.  $d.,  at 
$4.87,  $968. 

Statement: 

Net  Proceeds ;^i98     155.     ^d. 

Documentary  Ad- 
vance    £100     o-^-  o<^- 

Marine    Insurance  155.  od. 

Banker's  commis- 
sion   I     OS.  od. 

loi      155.     od. 

£91       OS.     sd. 
Gaetano  Botta  Sale,  $13,550;    Duty,  $750;    Cus- 
tom House  Brokerage,  $2.50;    Freight,  $2,940; 

72 


Cash. 


Cash. 


Back  of  Account 
Sales. 


Cash. 


Account  Sales. 


Cartage,  $15;    Insurance,  $4.00;    Cable,  $1.25; 

Auction    Charges,    $135.50;     Interest,    $67.75; 

Commission,    $677.50.     Net    Proceeds,    ;^i,827 

95.  2d.,  at  $4.90,   $8,956.50. 
L.  Rizzo  Sale,  $1,375;   Duty,  $75;   Custom  House 

Brokerage,  $1.00;  Freight,  $294;  Cartage,  $1.50; 

Insurance,  75c.;  Cable,  $1.25;  Auction  Charges, 

$13.75;     Interest,   $6.87;    Commission,   $68.75. 

Net  Proceeds,  ;^i86  35.,  at  $4.90,  $912.13. 
G.  Aita  Sale,  $1,300;    Duty,  $50;    Custom  House 

Brokerage,  50c.;    Freight,  $196;    Cartage,  75c.; 

Insurance,  $1.00;  Cable,  75c.;  Auction  Charges, 

$13.00;     Interest,   $6.50;    Commission,   $65.00. 

Net  Proceeds,  ;,^i97  45.  iid.,  at  $4.90,  $966.50. 
Purchased  of  Smith,  Jones  &  Robinson,  Bankers, 

Bills  of  Exchange  of  London  for  ;^97  05.    $d., 

£1,82^  95.   2d.,  ;£i86  35.,  £197  4s.   lid.,  total, 

;^2,307  175.  6d.,  at  $4.87,  $11,239.34,  which  was 

remitted  by  G.  Fava  to  the  above  shippers. 
Brown  &  Selcomb  advanced  $11,000. 
Paid  Cable,  $4.50. 

6th. 

Brown  &  Selcomb  render  Account  Sales,  Steamer 
Morro  Castle;  Gross  Sale,  $17,925;  Auction 
Charges,  $179.25;  Guarantee,  $179.25;  Cartage, 
$18.50;  Interest,  $87.74.  Net  Proceeds,  $17,- 
460.26. 

Brown  &  Selcomb  pay  check  for  balance  of  Morro 
Castle  consignment,  $460.26. 

8th. 

Received  consignment  Steamer  Trinacria: 

L.  Rizzo,  500  boxes  which  sold  for  $2,500.00; 
Duty,  $125.00;  Custom  House  Brokerage,  $2.50; 
Freight,  $245;  Cartage,  $12.50;  Insurance, 
$18.75;  Auction  Charges,  $25;  Commission, 
$125;  Interest,  $12.50.  Net  Proceeds,  $1,933.75; 
;i^394  135.,  at  $4.90. 

G.  Aita,  1,000  boxes,  sold  for  $4,000;  Duty,  $2 50; 
Custom  House  Brokerage,  $5;  Freight,  $49^5 
Cartage,  $25;  Insurance,  $30;  Auction  Charges, 
$40;  Interest,  $20;  Commission,  $200.  Net 
Proceeds,  $2,940;   ;^6oo. 

Tomasso  Cavallaro,  1,000  boxes,  sold  for  $2,475; 
Duty,  $250;  Freight,  $490;  Cartage,  $25;  In- 
surance, $18.50;  Custom  House  Brokerage, 
$5;  Auction  Charges,  $24.75;  Interest,  $12.40; 
Commission,  $123.70.  Net  Proceeds,  $1,525.65; 
;^3ii  6s.  6d. 


73 


Julio    Bonzano,    2,500   boxes,    sold    for    $10,500; 

Duty,    $625;     Custom    House    Brokerage,    $5; 

Freight,  $1,232.50;   Cartage,  $62.50;   Insurance, 

$78.70;  Auction  Charges,  $105;  Interest,  $52.50; 

Commission,  $525.      Net    Proceeds,    $7,813.80; 

;^i,594  135. 
Cash.  Brown  &  Selcomb  advanced  $18,500  on  shipment 

Steamer  Trinacria. 
Paid  Freight,  $2,457.50;  Duty,  $1,250;  Brokerage, 

$10. 
Paid  Insurance  Premium  on  floating  poHcy,  $150. 
Purchased  Bills  of  Exchange  for  ;^394  135.,  ;^6oo, 

;^3ii  6s.  6d.,  ;^i,594  135.;   total,  ;^2,90o  125.  6d. 

Paid  Scott  &  Company,  Bankers,  for  the  above 

drafts,  $14,213.15. 
Remitted  drafts  to  consignors  of  Trinacria  as  above. 
Brown  &  Selcomb  render  Account  Sales,  Trinacria ; 

Gross  Sale,  $19,475;   Auction  Charges,  $194.75; 

Guarantee,   $194.75;    Cartage,   $115;    Interest, 

$92.50.    Proceeds,  $18,878. 
Check  from  Brown  &  Selcomb,  $378,  in  settlement 

of  sales  of  Trinacria. 
Cash.  Purchased  of  Brown   Brothers   &   Company,    Ex- 

change   on    London    for   ;^ioi    155.,    at    $4.86, 

$494-5i- 
Post  from  Cash.  Remitted  the  above  bill  to  Carvalho  Brothers  to 

cover  Documentary  Advance  Ex.  Steamer  Morro 

Castle,  ;^ioi  155. 
Close  the  nominal  accounts  to  Profit  and  Loss. 

Transfer   the   Marine    Insurance    and    Banking 

Commission  to  Carvalho  Brothers'  Account. 
The  current  rate  for  Sight  Exchange  is  $4.90,  at 

the  date  of  closing  the  books.    To  ascertain  the 

profit  or  loss  on  exchange,  make  the  following 

entry. 
SterHng   Exchange   Account'  (New) 

;^209  i8s.    Sd.  at  $4.90 $1,028.67 

To  Sterling  Exchange  Account 

(Old)  ;^209  i8s.  8d $1,028.67 


74 


Sterling  Controlling  Account. 


^2887 

500 

2307 

18 

17 
12 

15 

2 

6 
6 
0 

2 

$14150 
2440 

11239 

14213 

494 

75 

34 
15 
51 

3177 
2409 
2900 

19 
12 
12 

6 
6 
6 

6 

8 
2 

15572 
1 1803 
14213 

07 

13 
20 

lOI 

8488 

Balance 
209 

4 

18 

41588 
1028 

40 

8698 

P.&L. 

3 

42537 
79 

75 
32 

67 

8698 

3 

2 

42617 

07 

8698 

3 

42617 

07 

209 

18 

8 

1028 

67 

OF  THE    "^ 


»Si^GB 


Nl^ 


75 


UNIVERSITY  OF 


CALIFORNIA  LIBRARY 


STAMPED  B^|OW^ 


DEC  26  ]m 


30m-l,'15 


Practice 


Woa 


.H.193394 
1  acr.o -anting 


.D4: 


HF^^ 


193394 


UNIVER! 


